Nash Bargaining Outcomes and Government Shutdowns
In Oliver Roeder’s article, “Why It’s Unlikely We’ll Get a Deal On the Wall Anytime Soon,” he addresses the meaning behind the government shutdown earlier this year in February and why it was plausible to happen again. The situation was this: President Trump was trying to reach a government deal that would fund the building of a wall on the U.S.-Mexico border. One considerable aspect of coming to an agreement was the question of time; Roeder argues that it did not matter when a deadline was set because an agreement would not be reached until the penultimate hour and the reason was that “either side (seemingly one being Trump and the other, House Democrats) would not believe they had fought well if an agreement was reached ‘early’” (Roeder).
This all constitutes a bargain. Trump would bargain for a price higher than what he thinks he could get, believing that he could then demand his true value while the deadline approaches. However, if he ended up receiving a price significantly below his true value, he would not agree to the deal and the government would shut down again. In the context of this class, though Trump could walk away receiving nothing, the fact that he controls whether or not the government could shut down gives him a lot of bargaining power, and in comparison to the Democrats, he has more power in the game. Both Trump and the Democrats have no outside options with which they can make a deal, and the no one (besides Trump) is willing to undergo a government shutdown. Trump also has other moves he has threatened to make such as declaring a national emergency. This alludes to the outcome being unbalanced, but becoming balanced if either an agreement can be made or if we add a third party (i.e. node), such as Senate Republicans who have the power to only pass bills that would end a government shutdown.
Article: https://fivethirtyeight.com/features/why-its-unlikely-well-get-a-deal-on-the-wall-anytime-soon/