PE Research Seminar: Parth Parihar

Date
Oct 15, 2019, 12:15 pm12:15 pm

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The paper examines a game of repeated bargaining in which two political parties bargain over a policy that decays in its efficiency over time.  Equilibrium recognition as the proposer is endogenized in a game of dynamic Wittman electoral competition and thus as a function of equilibrium policies proposed in the game.  I find that while the competitive environment provides mutual incentives for delay to reach an agreement (gridlock), these vanish as the number agreements (re)-negotiated in the game approach infinity.  Thus, foreshortening of the agreement horizon is a key ingredient for policy gridlock, even in a competitive electoral environment.  I show that polarization in policies passed on the equilibrium path is a strategic substitute for gridlock, that gridlock is increasing in the patience of agents, and that the partisan lean of future policies is positively correlated with that of the current status quo. Extensions that consider other frictions in political bargaining are briefly considered.