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Dynamic Legislative Policy Making under Adverse Selection

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  • Vincent Anesi

    (University of Nottingham, School of Economics)

Abstract

This paper develops a dynamic model of legislative policy making with evolving, privately observed policy preferences. Our goal is to find conditions under which decision rules, which assign feasible policies based on the legislators' preferences, are sustainable in the long run. We show that under some mild conditions, every decision rule that would be implementable with monetary transfers can be approximately sustained in a perfect Bayesian equilibrium of the dynamic model. In this equilibrium, the legislators receive payoffs arbitrarily close to those they would obtain if they could commit ex ante to truthfully apply the decision rule in every period. An application of our result yields a dynamic issue-by-issue median voter theorem in the vein of Baron's (1996) for a spatial framework with incomplete information.

Suggested Citation

  • 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.
    • Handle: RePEc:not:notcdx:2018-08
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    References listed on IDEAS

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    Cited by:

    1. Hülya Eraslan & Kirill S. Evdokimov & Jan Zápal, 2022. "Dynamic Legislative Bargaining," Springer Books, in: Emin Karagözoğlu & Kyle B. Hyndman (ed.), Bargaining, chapter 0, pages 151-175, Springer.

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    More about this item

    Keywords

    Committee voting; Information; Legislative bargaining; Sustainability;
    All these keywords.

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