Veto Games: Spatial Committees under Unanimity Rule.

There exists a large literature on two-person bargaining games and distribution games (or divide-the-dollar games) under simple majority rule, where in equilibrium a minimal winning coalition takes full advantage over everyone else. Here the authors extend the study to an n-person veto game where players take turns proposing policies in an n-dimensional policy space and everybody has a veto over changes in the status quo. Briefly, they find a Nash equilibrium where the initial proposer offers a policy in the intersection of the Pareto optimal set and the Pareto superior set that gives everyone their continuation values, and punishments are never implemented. Comparing the equilibrium outcomes under two different agendas--sequential recognition and random recognition--the authors find that there are advantages generated by the order of proposal under the sequential recognition rule. They also provide some conditions under which the players will prefer to rotate proposals rather than allow any specific policy to prevail indefinitely. Copyright 1998 by Kluwer Academic Publishers