Power brokers: Middlemen in legislative bargaining

TitlePower brokers: Middlemen in legislative bargaining
Publication TypeJournal Article
Year of Publication2016
AuthorsIaryczower M, Oliveros S
JournalJournal of Economic Theory
KeywordsBargaining, Intermediaries, Legislatures, Middlemen, Vote buying
AbstractWe study a model of decentralized legislative bargaining over public decisions with transfers. We establish the emergence of middlemen in legislative bargaining as a robust equilibrium phenomenon. We show that legislative intermediation can impact policy outcomes, and can be inefficient. To fulfill this role, the middleman's policy preferences and bargaining position must be such that its role of intermediary is credible. But the political middleman must also directly benefit from policy change. The results highlight fundamental differences between the role of intermediaries in politics and exchange economies.