We conduct a laboratory experiment to study the incentives of a privileged group (the "yellows") to share political power with another group (the "blues"). The yellows collectively choose the voting rule for a general election: a simple-majority rule that favors them, or a proportional rule. In two treatments, the blues can use a costly punishment option. We find that the yellows share power voluntarily only to a small extent, but they are more inclined to do so under the threat of punishment, despite the fact that punishments are not sub-game perfect. The blue group conditions punishments both on the voting rule and the electoral outcome.
We conduct a laboratory experiment to study the incentives of a privileged group (the "yellows") to share political power with another group (the "blues"). The yellows collectively choose the voting rule for a general election: a simple-majority rule that favors them, or a proportional rule. In two treatments, the blues can use a costly punishment option. We find that the yellows share power voluntarily only to a small extent, but they are more inclined to do so under the threat of punishment, despite the fact that punishments are not sub-game perfect. The blue group conditions punishments both on the voting rule and the electoral outcome.