In all democratic systems, policy outcomes are essentially the product of coalition formation and bargaining within the legislature. After a flurry of basic research on these topics in the 1960's and early 1970's, there has been very little progress in our understanding of the phenomena. However, recent analytical advances in theory have opened up new avenues for productive research. This research focuses on two logically distinct issues. The first concerns the role of uncertainty in legislative bargaining among parties in parliamentary democracies. In earlier work, the investigators explored the consequences of a particular type of bargaining institution when no party in a three-party legislature held a majority of seats. In this institution, the researchers assumed that the largest party was given the first opportunity to form a coalition government, proposing a policy to implement and a distribution of portfolios. If this party failed, then the next largest party was offered a similar opportunity, and so on. The researchers discovered that if there was no uncertainty about parties' objectives and relative evaluations of policy and portfolio, then the largest party would always form a coalition government successfully with the smallest party. Evidently, this does not always happen. One natural way to develop the model further, one which offers the possibility of predicting a richer set of legislative outcomes, is to make the more realistic assumption that not all facets of a party's objectives are known for sure by every other party. This development is the first issue that the investigators are studying under this award. The second issue concerns the role of portfolios in legislative outcomes. In the above referenced work, "portfolios" were characterized simply as perqs of office. Because the investigators assumed that policies had a very simple structure (viz. points on a line), this characterization was sensible. However, real policies are complex and portfolios are essentially allocations of rights and responsibilities for choosing certain aspects of overall policy. Recognizing this, the researchers are studying the strategic properties of a variety of institutions for determining how portfolios are allocated in coalition governments, and what policies they subsequently generate. Preliminary work already reveals that minority governments can occur and be stable under such institutions: hitherto, finding a theoretical model that can predict minority governments has proved elusive.
