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The portfolio allocation paradox: An investigation into the nature of a very strong but puzzling relationship
Author(s) -
WARWICK PAUL V.,
DRUCKMAN JAMES N.
Publication year - 2006
Publication title -
european journal of political research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.267
H-Index - 95
eISSN - 1475-6765
pISSN - 0304-4130
DOI - 10.1111/j.1475-6765.2006.00632.x
Subject(s) - salience (neuroscience) , economics , portfolio , bargaining power , politics , positive economics , microeconomics , portfolio allocation , political science , financial economics , law , psychology , cognitive psychology
. Perhaps the strongest empirical finding in political science is ‘Gamson's Law’: the near‐perfect relationship that exists in parliamentary systems between a coalition party's seat contribution to the government and its quantitative allocation of cabinet portfolios. Nevertheless, doubts remain. What would happen if the salience or importance of the various portfolios was also taken into account? Should it not be the case that payoffs correspond with bargaining power rather than seat contributions? And perhaps most significantly, would addressing these issues produce evidence that the parties designated to form governments extract disproportionately large payoffs for themselves, as predicted by ‘proposer’ models of bargaining? Utilizing the results of a new expert survey of portfolio salience in 14 Western European countries, the authors of this article explore each of these questions. Their basic finding is that salience‐weighted portfolios payoffs overwhelmingly mirror seat contributions, contra proposer models and any other models based on bargaining power. The article concludes with a discussion of the implications for formal models of bargaining.