Legislative Bargaining (over discrete bills)

We provide a theory of legislative bargaining in a setting where the institution-free model of social choice theory yields no equilibrium. We model negotiations over a set of discrete bills (i.e. bills that can only be approved or dismissed) as a repeated game where a status quo is amended until an agreement is reached. Our goal is to understand when logrolling or vote trading agreements occur. In a stylised setting with three voters and two bills, we …nd that negotiations may lead to three outcomes: (1) the majoritarian one; (2) the logrolling one where two players vote against their position on their least preferred bill in order to gain support for their most preferred bill; and (3) one where the most a¤ected voter by the logrolling outcome, in order to avoid such outcome, agrees to implement the wills of another voter. JEL Classi…cation: C72, C78, D72