Fully Absorbing Dynamic Compromise

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Abstract

I consider a repeated divide-the-dollar voting model with rejections leading to the implementation of the previous period's allocation (see Kalandrakis [14]). I show that if proposals can be non-exhaustive, then equal division can be achieved as an absorbing steady state from any initial allocation given a large enough discount factor as a part of a Markov Perfect equilibrium. This result is robust to changes in voting thresholds and persistence in proposal power outside of unanimity or total persistence.
Original languageEnglish
Pages (from-to)92-104
JournalJournal of Economic Theory
Volume152
Early online date31 Mar 2014
DOIs
Publication statusPublished - Jul 2014

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