Coalition Formation and Asymmetric Information in a Legislative Bargaining Game

To investigate players' incentives in coalition formation, we consider a legislative bargaining game with asymmetric information about time preferences. The force that does not exist in usual bargaining games with unanimity is that due to majority rule, if a player signals himself as the patient type, other players wish to exclude him from their coalitions because more is required to buy his vote. As a result, separating equilibria become harder to support, in the sense that type differences need to be large enough. If there exists one, we show that the only separating equilibrium that can survive under the intuitive criterion is such that the patient player forms oversized coalitions, and the impatient player prefers minimal-winning coalitions