Proto-coalition bargaining and the core

• Published in: Economic theory Vol. 51; no. 3; pp. 581 - 599
• Main Author: Breitmoser, Yves
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer 01.11.2012; Springer-Verlag; Springer Nature B.V
• Subjects: Analysis; Bargaining; Bargaining power; Bargaining theory; Coalition bargaining; Coalition governments; Coalition theory; Contract negotiations; Economic models; Economic policy; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Equilibrium; Game Theory; Games; Government; Mathematical models; Microeconomics; Modeling; Nuclear power plants; Parliamentary system; Proposals; Public Finance; Research Article; Social and Behav. Sciences; Strategic bargaining; Studies; Voting; United States; Coalition formation; Non-cooperative bargaining; C78; D72; Core; C72
• ISSN: 0938-2259; 1432-0479
• DOI: 10.1007/s00199-011-0608-8

In the proto-coalition model of government formation, formateur F appoints a proto-coalition and asks its members whether to start negotiating a coalition contract. If all accept, then the proto-coalition forms and starts negotiating; otherwise, a caretaker government assumes office. I extend this model by allowing F to revise the chosen proto-coalition after rejections, that he states pre-conditions for the subsequent negotiations, and that F's opponents may publicly pre-commit to accept/reject certain proposals. The set of equilibrium outcomes is identified as the core if F's opponents can pre-commit and as the convex hull of the core if they cannot pre-commit credibly. This extended model eliminates two flaws of the standard model: it explains why F cannot always install his favored coalition (whatever the status quo) and why "important" coalition members may have more bargaining power in the subsequent negotiations than others.