Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/221441 
Year of Publication: 
1994
Series/Report no.: 
Discussion Paper No. 1084
Publisher: 
Northwestern University, Kellogg School of Management, Center for Mathematical Studies in Economics and Management Science, Evanston, IL
Abstract: 
This paper provides a framework to study a two party electoral competition followed by a bargaining process in which the loser might choose an outside option costly to the winner. I investigate how this institutional structure affects voting behavior and policy outcomes. In equilibrium, the probablity of either candidate being elected decreases with its bargaining power. This paper stresses how uncertainty affects the probability of "civil unrest" which occurs when the loser exerts its outside option. I characterize an efficient mechanism for political bargaining under incomplete information and discuss the implications of the model for the study of political behavior under democratic transition.
Document Type: 
Working Paper

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