TY - JOUR
T1 - Delegation in Veto Bargaining
AU - Kartik, Navin
AU - Kleiner, Andreas
AU - van Weelden, Richard
N1 - Funding Information:
* Kartik: Department of Economics, Columbia University (email: nkartik@columbia.edu); Kleiner: Department of Economics, Arizona State University (email: andreas.kleiner@asu.edu); Van Weelden: Department of Economics, University of Pittsburgh (email: rmv22@pitt.edu). Jeffrey Ely was the coeditor for this article. We thank Nageeb Ali, Ricardo Alonso, Andy Daughety, Wouter Dessein, Wiola Dziuda, Alex Frankel, Sanjeev Goyal, Marina Halac, Elliot Lipnowski, Mallesh Pai, Mike Ting, Andy Zapechelnyuk, five anonymous referees, and various seminar and conference audiences for helpful comments. We gratefully acknowledge financial support from NSF grants SES-2018948, SES-2018983, SES-2018599. Bruno Furtado and Yangfan Zhou provided excellent research assistance.
Publisher Copyright:
© 2021 American Economic Association. All rights reserved.
PY - 2021/12
Y1 - 2021/12
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=85121898924&partnerID=8YFLogxK
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U2 - 10.9767/BCREC.17.1.12421.78-87
DO - 10.9767/BCREC.17.1.12421.78-87
M3 - Article
AN - SCOPUS:85121898924
SN - 0002-8282
VL - 111
SP - 4046
EP - 4087
JO - American Economic Review
JF - American Economic Review
IS - 12
ER -