A model of coalition formation: Theory and evidence

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Abstract

Coalition formation is modeled as a cooperative game. Each party enters the game endowed with a proportion (weight) of votes that it obtained in the election, and a preferred policy position. The payoffs to any party that joins a coalition are a function of the distance between the party's and the government's respective policy positions, and the office related payoff that the party receives as a member of the coalition. A new core solution concept, the IVCORE, is introduced. It allows the analysis of the trade-off between ideological, policy payoffs, and office-related sidepayments, in the bargaining process over future coalitions. It turns out that policy concerns of parties "induce" a core in a typical transferable payoffs game that would, otherwise, have a generically empty core. At the same time, the "budget constraint" on the office-related sidepayments, determines the composition of the coalition. The process of coalition formation in Israel, after the 1992 election, is used to illustrate the empirical relevance of the theoretical model.

Original languageEnglish
Pages (from-to)350-372
Number of pages23
JournalJournal of Politics
Volume58
Issue number2
DOIs
StatePublished - May 1996

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