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Party Formation And Coalitional Bargaining In A Model Of Proportional Representation

Author

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  • Mandar Oak
  • Siddhartha Bandyopadhyay
Abstract
We study a game theoretic model of a parliamentary democracy under proportional representation where ideologically motivated citizen groups form parties, voting occurs and governments are formed. We study the coalition governments that emerge as functions of the parties’ seat shares, the size of the rents from holding office and their ideologies. We show that governments may be minimal winning, minority or surplus. Moreover, coalitions may be ‘disconnected’. We then look at how the coalition formation game affects the incentives for party formation. In particular, we show that when the rents from office are low, the median citizen stands unopposed, and when rents are high, there is more political entry. For intermediate rents, we show that strategic dropouts can happen to influence the final policy. We show that the incentives for strategic dropout can be higher under proportional representation than plurality voting, contrary to Duverger’s law. Our model explains the diverse electoral outcomes seen under proportional representation and integrates models of political entry with models of coalitional bargaining.
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Suggested Citation

  • Mandar Oak & Siddhartha Bandyopadhyay, 2004. "Party Formation And Coalitional Bargaining In A Model Of Proportional Representation," Royal Economic Society Annual Conference 2004 37, Royal Economic Society.
    • Handle: RePEc:ecj:ac2004:37
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    Citations

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    Cited by:

    1. Mihir Bhattacharya, 2024. "A citizen-candidate model of party formation," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 15(3), pages 299-325, September.
    2. Siddhartha Bandyopadhyay & Mandar Oak, 2022. "Party Formation and Coalitional Bargaining in a Model of Proportional Representation," Games, MDPI, vol. 13(4), pages 1-17, June.
    3. Siddhartha Bandyopadhyay & Kalyan Chatterjee & Tomas Sjöström, 2013. "Pre-electoral Coalitions and Post-election Bargaining," World Scientific Book Chapters, in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 7, pages 129-181, World Scientific Publishing Co. Pte. Ltd..
    4. Antonio Merlo, 2005. "Whither Political Economy? Theories, Facts and Issues," PIER Working Paper Archive 05-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 01 Dec 2005.
    5. Siddhartha Bandyopadhyay & Kalyan Chatterjee & Tomas Sjöström, 2013. "Pre-electoral Coalitions and Post-election Bargaining," World Scientific Book Chapters, in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 7, pages 129-181, World Scientific Publishing Co. Pte. Ltd..
    6. Bandyopadhyay, Siddhartha & Oak, Mandar P., 2008. "Coalition governments in a model of parliamentary democracy," European Journal of Political Economy, Elsevier, vol. 24(3), pages 554-561, September.
    7. Paolo Balduzzi & Sandro Brusco, 2019. "Proportional Systems with Free Entry. A Citizen-Candidate Model," Department of Economics Working Papers 19-01, Stony Brook University, Department of Economics.
    8. Benoît Le Maux & Yvon Rocaboy, 2016. "Competition in fragmentation among political coalitions: theory and evidence," Public Choice, Springer, vol. 167(1), pages 67-94, April.
    9. Pech, Gerald, 2012. "Intra-party decision making, party formation, and moderation in multiparty systems," Mathematical Social Sciences, Elsevier, vol. 63(1), pages 14-22.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H19 - Public Economics - - Structure and Scope of Government - - - Other

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