Equity and Equality in Legislative Bargaining

Abstract

I study a distributive model of legislative bargaining in which the surplus generated by coalitions depends on the membership and the proposer. The vector of expected payoffs is unique and continuous in the characteristics of players when the surplus does not depend on the proposer's identity. The heterogeneous ability of players to generate surplus leads to asymmetric bargaining prospects in otherwise symmetric environments. More productive players have higher expected payoffs despite being recruited more often by other players, and the players who participate in every coalition have equal expected payoffs despite having different productivity. The bargaining outcomes are equal and efficient when the productivity is sufficiently homogeneous, while the effect of increased heterogeneity depends on the distribution of productivity. When the players become arbitrarily patient, the bargaining outcomes are equitable and efficient but not necessarily equal. An increase in the required quota promotes equality but leads to less equitable outcomes.