The Gains from Exchange Hypothesis of Legislative Organization

The gains from exchange hypothesis of legislative organization predicts that legislative authority is allocated in accord with legislator’s extremity or intensity of preferences. By adopting such patterns of authority, it is claimed legislators avoid the unpredictability of majority rule and allocate resources to those who value them the most. The underlying theory can be tersely summarized in question and answer form. What is exchanged and how? Parliamentary rights, as a function of preferences. What is gained and why? Stable and efficient outcomes, because of the preference-based exchange of authority.