American Economic Review Vol. 111 No. 12 2021
Delegation in Veto Bargaining
open access
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.
- DOI
- 10.1257/aer.20201817
- Volume
- 111
- Issue
- 12
- Pages
- 4046-4087
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref