Veto players and equilibrium uniqueness in the Baron–Ferejohn model

0460088 - NHU-C 2017 RIV US eng J - Článek v odborném periodiku
Celik, Levent - Karabay, Bilgehan
Veto players and equilibrium uniqueness in the Baron–Ferejohn model.
Theory and Decision. Roč. 81, č. 1 (2016), s. 33-52. ISSN 0040-5833. E-ISSN 1573-7187
Grant CEP: GA ČR(CZ) GAP402/12/0666
Institucionální podpora: PRVOUK-P23
Klíčová slova: multilateral bargaining * equilibrium uniqueness * veto players
Kód oboru RIV: AH - Ekonomie
Impakt faktor: 0.606, rok: 2016

In political economy, the seminal contribution of the Baron–Ferejohn bargaining model constitutes an important milestone for the study of legislative policy making. In this paper, we analyze a particular equilibrium characteristic of this model, equilibrium uniqueness. The Baron–Ferejohn model yields a class of payoff-unique stationary subgame perfect equilibria (SSPE) in which players’ equilibrium strategies are not uniquely determined. We first provide a formal proof of the multiplicity of equilibrium strategies. This also enables us to establish some important properties of SSPE. We then introduce veto players into the original Baron–Ferejohn model. We state the conditions under which the new model has a unique SSPE not only in terms of payoffs but also in terms of players’ equilibrium strategies.
Trvalý link: http://hdl.handle.net/11104/0260225