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The Politics of Blame: Bargaining before an Audience

Tim Groseclose and Nolan McCarty
American Journal of Political Science
Vol. 45, No. 1 (Jan., 2001), pp. 100-119
DOI: 10.2307/2669362
Stable URL: http://www.jstor.org/stable/2669362
Page Count: 20
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The Politics of Blame: Bargaining before an Audience
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Abstract

An important class of bargaining problems involve two negotiators who send signals to a third party. We show that these signaling incentives significantly influence (1) the proposals that they offer and (2) their decisions to accept or reject proposals. Consider the following case: Congress makes a take-it-or-leave-it offer (a bill) to the president, who either signs or vetoes it. A third party is uninformed about the president's preferences; however, by observing the bill that Congress writes and the president's veto decisions, it can learn about these preferences. Since in our model the president wants to appear moderate to voters, while Congress wants him to appear extreme, Congress sometimes writes a bill that it knows the president will veto. Thus, despite Congress and the president being completely informed, an uninformed third party causes the outcome to be Pareto inefficient. The model generates many empirical predictions, and we test one of these-that the president's approval rating should drop after a veto.

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