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Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints

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  • Vincent Anesi
  • T. Renee Bowen

Abstract

We study optimal policy experimentation by a committee. We consider a dynamic bargaining game in which committee members choose either a risky reform or a safe alternative each period. When no redistribution is allowed, the unique equilibrium outcome is generically inefficient. When redistribution is allowed (even small amounts), there always exists an equilibrium that supports optimal experimentation for any voting rule without veto players. With veto players, however, optimal policy experimentation is possible only with a sufficient amount of redistribution. We conclude that veto rights are more of an obstacle to optimal policy experimentation than are the constraints on redistribution themselves.

Suggested Citation

  • Vincent Anesi & T. Renee Bowen, 2021. "Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints," American Economic Journal: Microeconomics, American Economic Association, vol. 13(3), pages 124-162, August.
    • Handle: RePEc:aea:aejmic:v:13:y:2021:i:3:p:124-62
    DOI: 10.1257/mic.20190023
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    Cited by:

    1. Bowen, Renee & Hwang, Ilwoo & Krasa, Stefan, 2022. "Personal power dynamics in bargaining," Journal of Economic Theory, Elsevier, vol. 205(C).
    2. Vincent Anesi & Peter Buisseret, 2023. "The Politics of Bargaining as a Group," DEM Discussion Paper Series 23-12, Department of Economics at the University of Luxembourg.
    3. Nicolás Figueroa & José-Alberto Guerra & Francisco Silva, 2022. "The role of information in collective decisions," Documentos CEDE 20508, Universidad de los Andes, Facultad de Economía, CEDE.
    4. Vincent Anesi & Mikhail Safronov, 2023. "Deciding When To Decide: Collective Deliberation And Obstruction," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(2), pages 757-781, May.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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