Power brokers: Middlemen in legislative bargaining

We consider a model of decentralized bargaining among three parties. Parties meet one-on-one after being randomly matched, and can sell or buy votes to one another. The party with a majority of the votes can decide to implement its preferred policy or extend negotiations to capture additional rents. We provide necessary and sufficient conditions for the existence of an equilibrium in which a party acts as an intermediary, transferring resources and voting rights among parties that wouldn’t negotiate directly with one another. These conditions are generic, do not require special frictions, and include ‘well-behaved’ (i.e., single-peaked) preference profiles. ∗We thank Juliana Bambaci, Brandice Canes-Wrone, Alessandra Casella, Alessandro Lizzeri, Adam Meirowitz, Carlo Prato, Sebastian Saiegh and Francesco Squintani for comments and suggestions. †Matias Iaryczower: Department of Politics, Princeton University, Princeton, NJ 08544, email: [email protected]; Santiago Oliveros: Department of Economics, Royal Holloway, University of London, Egham, Surrey, TW20 0EX, e-mail: [email protected] “From the time he became Majority Leader, Johnson began using talk on the floor as a smoke screen for the maneuvering that was taking place in the cloakrooms, . . . , as a method of stalling the Senate to give him time to work out his deals.” Robert Caro in The Years of Lyndon Johnson, Master of the Senate.