Hostname: page-component-7b9c58cd5d-9k27k Total loading time: 0 Render date: 2025-03-15T22:23:46.484Z Has data issue: false hasContentIssue false
  • English
  • Français

Reference point effects in legislative bargaining: experimental evidence

Published online by Cambridge University Press:  14 March 2025

Nels Christiansen  and
John H. Kagel
Nels Christiansen*
Affiliation:
Department of Economics, Trinity University, San Antonio, TX, USA
John H. Kagel*
Affiliation:
Department of Economics, Ohio State University, Columbus, OH, USA
*
[email protected]
[email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Recent interest in reducing budget deficits raises questions regarding the impact on legislative bargaining of cuts versus increases in government spending. Using an experimental design where the outcomes are theoretically isomorphic results in significant differences in bargaining outcomes: There are longer delays in reaching agreement with cuts than with increases, along with which legislative types get their proposals passed. These results can be attributed to a change in agents’ reference point in conjunction with differential responses to gains versus losses.

Keywords

Reference point effectsLegislative bargainingBudget deficits versus budget surplusesExperiment

JEL classification

C52: Model Evaluation, Validation, and Selection C92: Laboratory, Group Behavior D72: Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Type
Original Paper
Information
Experimental Economics , Volume 22 , Issue 3: Special Issue in Honor of Charles R. Plott , September 2019 , pp. 735 - 752
Copyright
Copyright © 2017 Economic Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-017-9559-7) contains supplementary material, which is available to authorized users.

This is a substantially revised version of an earlier paper entitled, “The Effects of Increasing versus Decreasing Private Goods on Legislative Bargaining: Experimental Evidence”. We are grateful for comments received at the 2014 Behavioral Models of Politics Conference at Duke University, the 2013 Political Economy meeting at Cal Tech, and the 2013 Public Choice Society Meetings. We received able research assistance from Xi Qu and Matt Jones. This research has been partially supported by National Science Foundation Grant SES-1226460 and SES-1630288. Opinions, findings, conclusions or recommendations offered here are those of the authors and do not necessarily reflect the views of the National Science Foundation.

References

Agranov, M, Frechette, G, Palfrey, T, & Vespa, E (2016). Static and dynamic underinvestment: An experimental investigation. Journal of Public Economics, 143, 125–141. 10.1016/j.jpubeco.2016.09.001CrossRefGoogle Scholar
Baron, DP (1991). Majoritarian incentives, pork barrel programs, and procedural control. American Journal of Political Science, 35(1), 57–90. 10.2307/2111438CrossRefGoogle Scholar
Baron, DP, & Ferejohn, JA (1989). Bargaining in legislatures. American Political Science Review, 83(4), 1181–1206. 10.2307/1961664CrossRefGoogle Scholar
Bazerman, MH, Magliozzi, T, & Neale, MA (1985). Integrative bargaining in a competitive market. Organizational Behavior and Human Decision Processes, 34, 294–313. 10.1016/0749-5978(85)90026-3CrossRefGoogle Scholar
Camerer, CF, Johnson, EJ, Rymon, T, Sen, S Binmore, K, Kirman, A, & Tani, P (1993). Cognition and framing in sequential bargaining for gains and losses. Frontiers of game theory, Cambridge, MA: MIT Press 27–47.Google Scholar
Christiansen, N (2015). Greasing the wheels: Pork and public good contributions in a legislative bargaining experiment. Journal of Economic Behavior & Organization, 120, 64–79. 10.1016/j.jebo.2015.10.004CrossRefGoogle Scholar
Christiansen, N, Georganas, S, & Kagel, JH (2014). Coalition formation in a legislative voting game. American Economic Journal: Microeconomics, 6(1), 182–204.Google Scholar
Christiansen, N., Jhunjhunwala, T., & Kagel, J. H. (2017). Gains versus costs in legislative bargaining. http://www.econ.ohio-state.edu/kagel/CJK_all.pdf.Google Scholar
Cooper, D, Kagel, JH Kagel, JH, & Roth, A (2016). Other regarding preferences: A selective survey of experimental results. The handbook of experimental economics, Princeton: Princeton University Press.Google Scholar
Diermeier, D, Morton, R Austen-Smith, D, & Duggan, J (2005). Proportionality versus perfectness: Experiments in majoritarian bargaining. Social choice and strategic behavior: Essays in the honor of Jeffrey S. Banks, Berlin: Springer.Google Scholar
Evans, D (2004). Greasing the wheels: Using pork barrel projects to build majority coalitions in congress, Cambridge: Cambridge University Press 10.1017/CBO9780511617140CrossRefGoogle Scholar
Fiorina, M, & Plott, CR (1978). Committee decisions under majority rule: An experimental study. American Political Science Review, 72, 575–598. 10.2307/1954111CrossRefGoogle Scholar
Fishbacker, U (2007). z-Tree: Zurich toolbox for ready made economic experiments. Experimental Economics, 10, 171–178. 10.1007/s10683-006-9159-4CrossRefGoogle Scholar
Fréchette, G, Kagel, JH, & Morelli, M (2005). Nominal bargaining power, selection protocol, and discounting in legislative bargaining. Journal of Public Economics, 89, 1497–1517. 10.1016/j.jpubeco.2004.02.009CrossRefGoogle Scholar
Fréchette, G, Kagel, JH, & Morelli, M (2012). Pork versus public goods: An experimental study of public good provision within a legislative bargaining framework. Economic Theory, 49, 779–800. 10.1007/s00199-011-0611-0CrossRefGoogle Scholar
Greiner, B Kremer, K, & Macho, V (2004). An online recruitment system for economic experiments. Forschung und wissenschaftliches Rechnen. GWDG Bericht 63, Göttingen: Ges. für Wiss. Datenverarbeitung 79–93.Google Scholar
Harrington, JE Jr (1990). The role of risk preferences in bargaining when acceptance of a proposal requires less than unanimous approval. Journal of Risk and Uncertainty, 3(2), 135–154. 10.1007/BF00056369CrossRefGoogle Scholar
Jackson, MO, & Moselle, B (2002). Coalition and party formation in a legislative voting game. Journal of Economic Theory, 103(1), 49–87. 10.1006/jeth.2000.2688CrossRefGoogle Scholar
Kahneman, D, Knetsch, JL, & Thaler, RH (1990). Experimental tests of the endowment effect and the Coase theorem. Journal of Political Economy, 98(6), 1325–1348. 10.1086/261737CrossRefGoogle Scholar
Kahneman, D, & Tversky, A (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. 10.2307/1914185CrossRefGoogle Scholar
Kőszegi, B, & Rabin, M (2006). A model of reference-dependent preferences. The Quarterly Journal of Economics, 121(4), 1133–1165.Google Scholar
Kormendi, R, & Plott, CR (1982). Committee decisions under alternative procedural rules. Journal of Economic Behavior and Organization, 3, 175–195. 10.1016/0167-2681(82)90017-8CrossRefGoogle Scholar
Kristensen, H, & Gärling, T (1997). The effects of anchor points and reference points on negotiation processes and outcome. Organizational Behavior and Human Decision Processes, 71, 85–94. 10.1006/obhd.1997.2713CrossRefGoogle Scholar
Levine, M, & Plott, CR (1977). Agenda influence and its implications. Virginia Law Review, 63, 561–604. 10.2307/1072445CrossRefGoogle Scholar
McKelvey, RD, & Palfrey, TR (1991). An experimental test of a stochastic game model of committee bargaining. Contemporary laboratory research in political economy, Ann Arbor: University of Michigan Press.Google Scholar
Neale, MA, & Bazerman, MH (1985). The effects of framing and negotiator overconfidence on bargaining behaviors and outcomes. The Academy of Management Journal, 28(1), 34–49.Google Scholar
Palfrey, T Kagel, JH, & Roth, AE (2016). Experiments in political economy. The handbook of experimental economics, Princeton: Princeton University Press.Google Scholar
Plott, CR, & Zeiler, K (2005). The willingness to pay—willingness to accept gap, the ‘endowment effect’, subject misconceptions, and experimental procedures for eliciting valuations. The American Economic Review, 95(3), 530–545. 10.1257/0002828054201387CrossRefGoogle Scholar
Pratt, JW (1964). Risk aversion in the small and in the large. Econometrica, 32(1/2), 122–136. 10.2307/1913738CrossRefGoogle Scholar
Volden, C, & Wiseman, AE (2007). Bargaining in legislatures over particularistic and collective goods. American Political Science Review, 101(1), 79–92. 10.1017/S0003055407070037CrossRefGoogle Scholar
Supplementary material: File

Christiansen and Kagel supplementary material

Appendix
Download Christiansen and Kagel supplementary material(File)
File 56.3 KB