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DYCODE – Nicola Maaser (University of Aarhus): "Power Illusion in Coalitional Bargaining"

December 04, 2018, 16-18
S 106 (FAN)

One feature of legislative bargaining in the real world is that the distribution of seats or voting weights often does not accurately reflect real bargaining power. Game-theoretic predictions about payoffs and coalition formation are insensitive to such purely nominal differences. The converse idea that nominal differences might matter is referred to as 'power illusion'. We conduct an experimental test of the classical Baron-Ferejohn model with five-player groups. We compare treatments with differences in nominal power holding real power constant. We find strong evidence for the existence of power illusion in almost all aspects of bargaining behavior even if subjects got familiar with the game. This implies that attention needs to be paid to nominal power differentials in the design of weighted voting systems.

This talk is part of the DYCODE lecture series.

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