American Economic Journal: Microeconomics
no. 3, August 2021
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.
Anesi, Vincent, and T. Renee Bowen.
"Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints."
American Economic Journal: Microeconomics,
Bargaining Theory; Matching Theory
Social Choice; Clubs; Committees; Associations
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Positive Analysis of Policy Formulation and Implementation
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies