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The Open Method of Coordination (OMC) as an Evolutionary Learning Process

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Listed author(s):
  • Ana B. Ania
  • Andreas Wagener

Abstract

We interpret the Open Method of Coordination (OMC), recently adopted by the EU as a mode of governance in the area of social policy and other fields, as an imitative learning dynamics of the type considered in evolutionary game theory. The best-practise feature and the iterative design of the OMC correspond to the behavioral rule “imitate the best.” In a redistribution game with utilitarian governments and mobile welfare beneficiaries, we compare the outcomes of imitative behavior (long-run evolutionary equilibrium), decentralized best-response behaviour (Nash equilibrium), and coordinated policies. The main result is that the OMC allows policy coordination on a strict subset of the set of Nash equilibria, favoring in particular coordination on intermediate values of the policy instrument.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-04/cesifo1_wp2601.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2601.

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Date of creation: 2009
Handle: RePEc:ces:ceswps:_2601
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Keywords: Open Method of Coordination; Finite-population Evolutionarily Stable Strategy; imitation; mobility; redistribution;

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Find related papers by JEL classification:
  • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
  • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
  • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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Cited by:

  1. Ania, Ana B. & Wagener, Andreas, 2016. "Decentralized redistribution in a laboratory federation," Journal of Urban Economics, Elsevier, vol. 93(C), pages 49-59.
  2. Sebastian Strunz, Erik Gawel, and Paul Lehmann, 2015. "Towards a general Europeanization of EU Member States energy policies?," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
  3. Creutzig, Felix & Goldschmidt, Jan Christoph & Lehmann, Paul & Schmid, Eva & von Blücher, Felix & Breyer, Christian & Fernandez, Blanca & Jakob, Michael & Knopf, Brigitte & Lohrey, Steffen & Susca, Ti, 2014. "Catching two European birds with one renewable stone: Mitigating climate change and Eurozone crisis by an energy transition," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 1015-1028.
  4. Fei Shi, 2015. "Long-run technology choice with endogenous local capacity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(2), pages 377-399, June.

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