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

Ana Ania () and Andreas Wagener

Journal of Public Economic Theory, 2014, vol. 16, issue 5, 767-795

Abstract: In view of the concept of laboratory federalism, the Open Method of Coordination (OMC), adopted by the EU as a mode of governance, can be interpreted as an imitative learning dynamics of the type considered in evolutionary game theory. Its iterative design and focus on good practice are captured by the behavioral rule “imitate the best.” In a redistribution game with utilitarian governments and mobile welfare recipients, we compare the outcomes of imitative behavior (long-run evolutionary equilibria) and decentralized best-response behavior (Nash equilibria). The learning dynamics leads to coordination on a strict subset of Nash equilibria, favoring policy choices that can be sustained by a simple majority of Member States.

Date: 2014
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Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

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Handle: RePEc:bla:jpbect:v:16:y:2014:i:5:p:767-795