| Abstract: | This paper examines the strategies that "horse traders" and "power brokers" adopt in trading favors to pass legislation. Although the favors that they trade are generally impossible to observe, the paper develops a model that allows tests of favor trading. With data from the Senate vote on the Byrd Amendment to the 1990 Clean Air Act I conduct such a test. The test provides evidence that on this vote (i) favor trading occurred, (ii) the coalition leaders practiced price discrimination, and (iii) the coalition leaders did not collude with each another. |
