We present a legislative bargaining model of the provision of a durable public good over an in nite horizion. In each period, there is a societal endowment which can either be invested in the public good or consumed. We characterize the optimal public policy, de ned by the time path of investment and consumption. In each period, a legislature with representatives of each of n districts bargain over the current period's endowment for investment in the public good and transfers to each district. We analyze the Markov perfect equilibrium under di erent voting q-rules where q is the number of yes votes required for passage. We show that the e ciency of the public policy is increasing in q because higher q leads to higher investment in the public good and less pork. We examine the theoretical equilibrium predictions by conducting a laboratory experiment with ve-person committees that compares three alternative voting

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Alternating-offer and demand bargaining models of legislative bargaining make very different predictions in terms of both ex-ante and ex-post distribution of payoffs, as well as the role of the order of play. The experiment shows that actual bargaining behavior is not as sensitive to the different bargaining rules as the theoretical point predictions, while the comparative statics are in line with both models. We compare our results to studies attempting to distinguish between these two approaches using field data, finding strong similarities

We experimentally test competing theories of three-player majoritarian bargaining models with fixed, known reservation values. Subjects are randomly assigned to three roles: a proposer and two types of voters. Each role is randomly assigned a reservation value, i.e. a given amount of money he/she will receive if the proposal is rejected. These values are known to all players. Proposers then can make a take-it-or-leave-it offer on how to split a fixed, known amount of money among the players. If a majority of players accepts the proposal, the players ’ payoffs are determined by the proposal; if the proposal is rejected, each player receives his or her reservation value. We assess the ability of three behavioral hypotheses – selfish-subgame perfect, egalitarian, and “fair ” (inequality averse) behavior – to account for our results. Our primary design variable is the proposer’s reservation value, which allows us to obtain different implications from each hypothesis. We find that each hypothesis is inconsistent with our data in important respects. In particular, subjects strongly respond to changes in reservation values as if In 1978 Romer and Rosenthal published an alternative to Black’s median voter theory for