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Policy Reform

Author

Listed:
  • Avidit Acharya

    (Stanford University)

  • Juan Ortner

    (Boston University)

Abstract

We construct a model of policy reform in which two players continually search for Pareto improving policies. The players have imperfect control over the proposals that are considered. Ineffcient gridlock takes place due to the difficulty in finding moderate policies. The reform process is path dependent, with early agreements determining long-run outcomes. The process may also be cyclical, as players alternate between being more and less accommodating. Our model provides a noncooperative foundation for the "Raiffa path", by which bargainers gradually approach the Pareto frontier.

Suggested Citation

  • Avidit Acharya & Juan Ortner, 2017. "Policy Reform," Boston University - Department of Economics - Working Papers Series WP2017-007, Boston University - Department of Economics.
    • Handle: RePEc:bos:wpaper:wp2017-007
    as

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    File URL: http://www.bu.edu/econ/files/2017/04/Ortner-Policy.pdf
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    References listed on IDEAS

    as
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    Cited by:

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    2. Zapal, Jan, 2020. "Simple Markovian equilibria in dynamic spatial legislative bargaining," European Journal of Political Economy, Elsevier, vol. 63(C).
    3. Philip Grech & Oriol Tejada, 2018. "Divide the dollar and conquer more: sequential bargaining and risk aversion," International Journal of Game Theory, Springer;Game Theory Society, vol. 47(4), pages 1261-1286, November.

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