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Reference point effects in legislative bargaining: experimental evidence

Published online by Cambridge University Press:  14 March 2025

Nels Christiansen  and
John H. Kagel
Nels Christiansen*
Affiliation:
Department of Economics, Trinity University, San Antonio, TX, USA
John H. Kagel*
Affiliation:
Department of Economics, Ohio State University, Columbus, OH, USA
*
nels.christiansen@trinity.edu
kagel.4@osu.edu
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Abstract

Recent interest in reducing budget deficits raises questions regarding the impact on legislative bargaining of cuts versus increases in government spending. Using an experimental design where the outcomes are theoretically isomorphic results in significant differences in bargaining outcomes: There are longer delays in reaching agreement with cuts than with increases, along with which legislative types get their proposals passed. These results can be attributed to a change in agents’ reference point in conjunction with differential responses to gains versus losses.

Keywords

Reference point effectsLegislative bargainingBudget deficits versus budget surplusesExperiment

JEL classification

C52: Model Evaluation, Validation, and Selection C92: Laboratory, Group Behavior D72: Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior

Information

Type
Original Paper
Information
Experimental Economics , Volume 22 , Issue 3: Special Issue in Honor of Charles R. Plott , September 2019 , pp. 735 - 752
Copyright
Copyright © 2017 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-017-9559-7) contains supplementary material, which is available to authorized users.

This is a substantially revised version of an earlier paper entitled, “The Effects of Increasing versus Decreasing Private Goods on Legislative Bargaining: Experimental Evidence”. We are grateful for comments received at the 2014 Behavioral Models of Politics Conference at Duke University, the 2013 Political Economy meeting at Cal Tech, and the 2013 Public Choice Society Meetings. We received able research assistance from Xi Qu and Matt Jones. This research has been partially supported by National Science Foundation Grant SES-1226460 and SES-1630288. Opinions, findings, conclusions or recommendations offered here are those of the authors and do not necessarily reflect the views of the National Science Foundation.

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