Agenda-Setter Power Dynamics: Learning in Multi-Issue Bargaining
We study a dynamic bargaining model between a fixed agenda-setter and responder over successive issues. If the responder rejects the setter’s proposal, the setter can attempt to assert her will to implement her ideal and will succeed with a probability that depends on her “personal power”. The players learn about the setter’s power as gridlock persists. Gridlock occurs when the setter’s perceived power is either too high or too low, and the players reach compromise in an intermediate interval of beliefs. The presence of “difficult” issues can induce more compromise as the players have incentives to avoid learning.
We thank Nageeb Ali, Georgy Egorov, Roger Myerson, Juan Ortner for helpful comments and Xiameng Hua for excellent research assistance. We also thank the seminar audiences at the Harris School of Public Policy, University of British-Columbia and the Virtual Seminar in Economic Theory, as well as the participants at the POLECONUK conference and the 2nd ETH Workshop on Democracy: Theoretical Political Economy. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.