Game Theoretic Models of Public Choice and Political Economy

Abstract

This thesis is composed of three chapters, which can be read independently. In the first one, we present and solve some bargaining games a la Rubinstein, where the subjects can delegate the negotiating process to agents. Delegation is aimed to provide the delegating party with a higher bargaining power. When both parties delegate, uncertainty arises about the final distribution of the payoffs and multiple equilibria are possible. The seller loses his usual first mover's advantage. When we allow for delegation costs, the range of multiple equilibria shrinks. the final outcome of the game may be now inefficient for the principals and a prisoners' dilemma may arise. In the second chapter, we develop a model of simultaneous and sequential voting in a committee where members do not share their private information and do not have the same preferences. When objective functions differ, an optimal order of voting in the sequential game is found, leading to a unique socially optimal equilibrium. Our result rationalizes the presence of biased (i.e. partisan) voters in small committees as a way of reaching social optimality. Finally, in the third chapter, we acknowledge that, beside the traditional public-private dichotomy for the provision of public services, an increasing attention has been devoted to the use of partnerships. We compare relative inefficiencies of public provision, traditional private provision and PPPs. We also analyze the effect of workers' efforts and incentives on the success of the device.