Delegation in Veto Bargaining

Navin Kartik, Andreas Kleiner, Richard van Weelden

Research output: Contribution to journalArticlepeer-review

Abstract

A proposer requires a veto player's approval to change a status quo. Proposer is uncertain about Vetoer's preferences. We show that Vetoer is typically given a non-singleton menu, or delegation set, of options to pick from. The optimal set balances the extent of compromise with the risk of a veto. We identify conditions for certain delegation sets to emerge, including “full delegation”: Vetoer can choose any action between the status quo and Proposer's ideal action. By contrast to expertise-based delegation, Proposer gives less discretion to Vetoer when their preferences are more (likely to be) aligned.

Original languageEnglish (US)
Pages (from-to)4046-4087
Number of pages42
JournalAmerican Economic Review
Volume111
Issue number12
DOIs
StatePublished - Dec 2021
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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