Essays on Communication in Collective Bargaining

Abstract

This collection of essays study how institutions shape incentives for communication in collective bargaining where players have private information about their private values. Normative implications for institutional design are also derived.

The first chapter studies two institutional arrangements in collective bargaining incomplete information. In one setting, cheap-talk communication precedes a take-it-or-leave-it agenda-setting game. The second involves sequential agenda setting in which the setter can revise the proposal only when the first one fails to gain enough support. The latter institution requires the setter to commit to a policy as a screening technology. The commitment fosters information disclosure from strategic voters and thus results in efficiency gains over straw polls. With a focus on monotone equilibrium, I also find that majority rule sometimes induces less information disclosure than unanimity rule.

The second chapter studies information transmission in sequential and collective bargaining with incomplete information. I illustrate that the revelation of a voter' preference in the initial voting depends on three concerns: (1) his vote may be pivotal, (2) his vote provides a signal that sways the future proposal toward his ideal, and (3) his vote provides a signal to induce a more greedy proposal, which is more likely to fail. Although the third concern may prevent preference disclosure, especially for the voter who likes the status quo the best, I show that the agenda-setting power makes such incentive dominated. Hence, an informative equilibrium exists. The model illustrates the effect of the agenda-setting power on extracting information in collective-decision environments.

The third chapter (jointly written with Yiqing Xu) studies why and how an authoritarian regime allows citizens to publicly express preferences to strengthen its rule. We argue that public communication has two functions. First, it disorganizes the citizens or strengthens their disagreement if, through communication, they find themselves split over government policies. Second, if communication reveals that citizens share a high level of dissatisfaction, the government identifies the danger and improves the policies accordingly. We characterize conditions under which the authoritarian government prefers public communication, even when private polling is feasible. These results shed light on empirical regularities in authoritarian governance.