Status Quo versus Outside Option in Parliamentary Politics
نویسندگان
چکیده
This paper is built on the work of Baron and Diermeier (2001, Quarterly Journal of Economics), which highlights the role of the status quo policy in parliamentary politics. Our main modi cation is to introduce outside optionsto make a distinction between voters and members of parliament whose parties are not in government. As the value of outside options increases, the status quo relative to outside options becomes less important in terms of partiesbargaining strength. It is shown among others that if the value of outside options becomes su¢ ciently high, the status quo no longer has its bite on outcomes and the median-voter theorem holds in essence. Corresponding author. Department of Economics, National Tsing Hua University, 101, Section 2, KuangFu Road, Hsinchu 300, Taiwan. Email: [email protected]
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