In a veto game, we investigate the effects of “buyout” which allows non-veto players strategically form an intermediate coalition. First, our experimental findings show that the proportion of intermediate coalition formation is much lower than predicted by theory, regardless of the relative negotiation power between veto and non-veto players. Second, allowing coalition formation among non-veto players does not affect the surplus distribution between veto and non-veto players, which diverges from core allocations. These findings contrast to the literature, which views the ability to form an intermediate coalition as a valuable asset for non-veto players in increasing their bargaining power.
Bibliographical noteFunding Information:
We are grateful to the editor and two referees for their valuable comments that substantially improved our paper. We are also thankful to Syngjoo Choi, Subhasish Chowdhury, Daeyoung Jeong, Duk Gyoo Kim, Semin Kim, Jaeok Park, Euncheol Shin, and seminar participants at Yonsei University for valuable comments. All remaining errors are our own. This work was supported by the Yonsei University Future-leading Research Initiative of 2018 ( RMS2 2018-22-0088 ) and Korea University Grant ( K1720421 ).
This work was supported by the Yonsei University Future-leading Research Initiative of 2018 ( RMS2 2018-22-0088 ) and Korea University Grant ( K172042 ).
© 2022 Elsevier B.V.
- Coalition bargaining
- Game theory
- Intermediate coalition formation
- Non-core allocation
- Veto game
ASJC Scopus subject areas
- Economics and Econometrics
- Political Science and International Relations