Ulric B. and Evelyn L. Bray Seminar in Political Economy

It is commonly believed that, contrary to majority rule, unanimity rule safeguards the rights of each individual, and hence protects minorities from the possibility of expropriation. We show that this is not necessarily the case in bargaining environments. We study a multilateral bargaining model with heterogeneous players where the division of the cake is determined collectively through voting. We show that as players become perfectly patient unanimity rule generates equilibrium outcomes that are more unequal (or less equitable) than equilibrium outcomes under majority rule. Also, we explore the general trade-offs between equity and efficiency and establish a number of results that pertain to the issue of inequality of equilibrium allocations across different voting rules.