Communication in legislative bargaining

Abstract

We investigate the Baron-Ferejohn (The American Political Science Review 83(4): 1181-1206, 1989) model of legislative bargaining with cheap talk between the designated proposer and potential coalition partners. Communication results in substantially increased proposer power close to the stationary subgame perfect equilibrium prediction. This is achieved primarily through voters competing with each other to get the proposer to include them in the winning coalition, while arguing for a zero allocation for redundant voters. Voters typically follow through on their stated reservation shares, but proposers often fail to partner with voters making excessively low offers, as these are more likely to be reneged on.