Polar Coalitions in a Legislative Bargaining Game

Abstract. This paper considers an alternating offer legislative bargaining game with heterogeneous ideological preferences modeled as ideal points on an interval. The main contribution is a framework for measuring two forces that typically give proposers incentive to form coalitions out of either the left or right halves of the ideological spectrum “polar coalitions”. For a benchmark model with a particular payoff specification and two-period bargaining horizon, I show that the unique subgame perfect equilibrium entails only polar coalition formation independent of the ideal point distribution. This leads to the counterintuitive result that groups out of the center cannot form coalitions in equilibrium no matter how similar are their preferences. I then relax the assumptions of the benchmark model and derive a sufficient condition for polar coalition formation. I also present numerical evidence from the infinite horizon setting. Journal of Economic Literature Classification Code: D72.