In parliamentary democracies, political parties bargain over the allocation of cabinet portfolios when forming coalition governments. The non-cooperative theory of bargaining predicts the formation only of minimal winning coalitions. However, the empirical evidence suggests that half of all governments are either minority or super-majority. In this paper, we develop a multistage non-cooperative bargaining model of multi-party government formation where political parties care both about the allocation of cabinet positions and the expected policy implemented by the future government. For sufficiently high values of the "policy concern" parameter, parties may be willing to sacrifice the office benefits in their entirety in order to achieve a more desirable government policy. Minority government are predicted in equilibrium with the support of external parties with high policy concern. Furthermore, the introduction of uncertainty over implemented policy allows to explain why parties have an advantage to form super-majority governments. With
Rebecca Morton and
Jessica Trounstine. [This draft: 10/07]