Proposal Rights and Political Power 1.pdfVIP

W. ALLEN WALLIS Institute of POLITICAL ECONOMY UNIVERSITY OF ROCHESTER Proposal Rights and Political Power Tasos Kalandrakis Working Paper No. 38 June 2004 Proposal Rights and Political Power1 Tasos Kalandrakis2 In a canonical model of sequential collective bargaining over a divisible good we show that equilibrium expected payoffs are not restricted by players’ voting rights or their impatience. For all monotonic voting rules and discount factors, and for all divisions of the good among players, there exists a stationary proposal-making rule such that this division represents players’ expected payoffs in a Stationary Subgame Perfect Nash equilibrium in pure strategies. The result attests to the significance of proposal rights in determining political power in collective deliberations. JEL Classification Numbers: C72, C73, C78. Keywords: Power, Proposal Rights, Voting Rights. 1Thanks to John Duggan and David Primo for prompt feedback. I am responsible for any errors. 2Assistant Professor, Department of Political Science, Yale University Visiting Fellow of Political Economy, University of Rochester. Correspondence Address: W. Allen Wallis Institute of Political Economy, 107 Harkness Hall, University of Rochester, Rochester, NY 14627-0158. E-mail: kalandrakis@yale.edu. 1 1. INTRODUCTION The purpose of this paper is to further our understanding of political power in a committee environment. We consider the problem of a group of two or more agents who must split a fixed divisible good. Agents cannot use physical force to divide this good. Our goal is to clarify the role and relative significance of other features of the political environment such as voting rights, proposal rights, agents’ patience, etc. in determining political power. Following Shapley and Shubik, 1954, we gauge political power in terms of expected outcomes, rather than a priori equate it with individual pre