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Delegation in Veto Bargaining

Resource type
Authors/contributors
Title
Delegation in Veto Bargaining
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.
Publication
American Economic Review
Volume
111
Issue
12
Pages
4046-87
Date
2021-12
Citation
Kartik, N., Kleiner, A., & Van Weelden, R. (2021). Delegation in Veto Bargaining. American Economic Review, 111, 4046–4087.
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