Research Highlight

The emergence and persistence of oligarchy: A dynamic model of endogenous political power

We study an infinite-horizon multilateral bargaining game in which the status quo policy, players' recognition probabilities, and their voting weights are endogenously determined by the previous bargaining outcome. With players not discounting future payoffs, we show that the long-run equilibrium outcome features the concentration of power by one or two players, depending on the initial bargaining state. If the players' initial shares are relatively equal, they successfully prevent tyranny, but a two-player oligarchy nevertheless emerges and persists. The same results are obtained with payoff discounting, provided that the players' shares are not too small. Our results highlight the importance of the initial power distribution and discounting of future payoffs in the long-run development of power configuration.
SNU KBER
Korea Bureau of Economic Research and Innovation(KBER)
Room 111, Building #223
Seoul National University
1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea
Copyright (c) KBER All rights reserved.