Elections, Coalitions, and Legislative Outcomes

This paper develops a multi-stage game-theoretic model of three-party competition under proportional representation. The final policy outcome of the game is generated by a non-cooperative bargaining game between the parties in the elected legislature. This game is essentially defined by the vote shares each party receives in the general election, and the parties' electoral policy positions. At the electoral stage parties and voters are strategic in that they take account of the legislative implications of any electoral outcome. We solve for equilibrium electoral positions by the parties and final policy outcomes