3 - An Agent-Based Model of Government Formation and Survival

Summary

We build an agent-based model (ABM) of how senior politicians navigate the complex governance cycle using relatively simple heuristics. They first test whether they can form a single party minority government. If not, they seek coalition partners and negotiate with these. They treat “Gamson’s Law” – government parties get perks payoffs in proportion to their seat shares – as common knowledge. When different politicians attach different importance to the same issue, "logrolling" allows them to realize gains from trade and agree a joint policy position even when they have divergent policy preferences. We allow for the realistic possibility that multiple proposals for government are under consideration at the same time. Nonetheless, there may often be a “Condorcet winner” among the set of proposals, which beats all others in pairwise comparisons. Finally, we specify a model of government survival, which assumes incumbent governments are subject to a stream of unbiased random shocks which may perturb model parameters so much that legislators now prefer some alternative to the incumbent. For any given government, our model allows us to estimate the probability of this happening.