| María Montero (University of Nottingham). |
| Bargaining in weighted majority games |
| Abstract This paper studies how the distribution of voting weights affects expected payoffs in the Baron-Ferejohn model of legislative bargaining. It provides a necessary and sufficient condition for equilibrium expected payoffs to be proportional to the voting weights. This condition has a natural interpretation in terms of the supply and demand for coalition partners. The condition is checked for actual distributions of voting weights in European parliaments, and is found to hold around 60% of the time. Substantial deviations from proportionality are also possible and paradoxical phenomena of the type displayed by power indices can arise as equilibrium features. In particular, the paradox of new members can occur and it can be even more extreme than suggested by power indices. |