Incomplete information and bargaining in the EU: An explanation of first-reading non-agreements

Abstract:

According to the logic of standard veto bargaining models with complete information, bargaining in the European Union should never reach the second reading of the ordinary legislative procedure (co-decision). Even so, non-agreement at the first reading occurs frequently in European Union decision making. How can this be explained? Drawing upon game theory on bargaining with incomplete information, two specific predictions with regard to the occurrence of first-reading non-agreements can be generated. First-reading agreements are less likely to occur (1) the greater the distance between the ideal point of the Council and the ideal point of the European Parliament and (2) the greater the salience attached to the proposal. This article combines positional and proposal-specific data and finds robust support for both hypotheses in two different empirical tests.