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Asymmetric Information and the Coherence of Legislation

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  • Austen-Smith, David
  • Riker, William H.

Abstract

Legislators' beliefs, preferences, and intentions are communicated in committees and legislatures through debates, the proposal of bills and amendments, and the recording of votes. Because such information is typically distributed asymmetrically within any group of decision makers, legislators have incentives to reveal or conceal private information strategically and thus manipulate the collective decision-making process in their favor. In consequence, any committee decision may in the end reflect only the interests of a minority. We address a problem of sharing information through debate in an endogenous, agenda-setting, collective-choice process. The model is game theoretic and we find in the equilibrium to the game that at least some legislators have incentives to conceal private information. Consequently, the final committee decision can be “incoherent†by failing to reflect the preferences of all committee members fully. Additionally, we characterize the subset of legislators with any incentive to conceal data.

Suggested Citation

  • Austen-Smith, David & Riker, William H., 1987. "Asymmetric Information and the Coherence of Legislation," American Political Science Review, Cambridge University Press, vol. 81(3), pages 897-918, September.
  • Handle: RePEc:cup:apsrev:v:81:y:1987:i:03:p:897-918_20
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    Cited by:

    1. Holm, Håkan, 2000. "Politically Correct Information Adoption," Working Papers 2000:5, Lund University, Department of Economics.
    2. Feld, Lars P. & Kirchgassner, Gebhard, 2000. "Direct democracy, political culture, and the outcome of economic policy: a report on the Swiss experience," European Journal of Political Economy, Elsevier, vol. 16(2), pages 287-306, June.
    3. Frisell, Lars, 2000. "Taking Advice from Imperfectly Informed Lobbyists: When to Match Hawks with Hawks," SSE/EFI Working Paper Series in Economics and Finance 355, Stockholm School of Economics.
    4. Marco Battaglini, 2002. "Multiple Referrals and Multidimensional Cheap Talk," Econometrica, Econometric Society, vol. 70(4), pages 1379-1401, July.
    5. Dimitri Landa & Adam Meirowitz, 2009. "Game Theory, Information, and Deliberative Democracy," American Journal of Political Science, John Wiley & Sons, vol. 53(2), pages 427-444, April.
    6. Cohen, Lauren & Diether, Karl & Malloy, Christopher, 2013. "Legislating stock prices," Journal of Financial Economics, Elsevier, vol. 110(3), pages 574-595.
    7. Vincent Anesi, 2018. "Dynamic Legislative Policy Making under Adverse Selection," Discussion Papers 2018-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    8. William Riker, 1987. "The lessons of 1787," Public Choice, Springer, vol. 55(1), pages 5-34, September.
    9. Diego Varela, 2009. "Just a Lobbyist?," European Union Politics, , vol. 10(1), pages 7-34, March.
    10. Herrera, Helios & Reuben, Ernesto & Ting, Michael M., 2017. "Turf wars," Journal of Public Economics, Elsevier, vol. 152(C), pages 143-153.
    11. David Baron & Adam Meirowitz, 2006. "Fully-Revealing Equilibria of Multiple-Sender Signaling and Screening Models," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 26(3), pages 455-470, June.
    12. Twight, Charlotte, 1996. "Federal control over education: Crisis, deception, and institutional change," Journal of Economic Behavior & Organization, Elsevier, vol. 31(3), pages 299-333, December.
    13. Raphael Godefroy & Nicolas Klein, 2018. "Parliament Shapes And Sizes," Economic Inquiry, Western Economic Association International, vol. 56(4), pages 2212-2233, October.
    14. Schnakenberg, Keith E., 2015. "Expert advice to a voting body," Journal of Economic Theory, Elsevier, vol. 160(C), pages 102-113.
    15. Scott E. Page, 1998. "Uncertainty, Difficulty, and Complexity," Research in Economics 98-08-076e, Santa Fe Institute.

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