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Policy Experimentation, Redistribution and Voting Rules

Vincent Anesi () and T. Renee Bowen

No 2018-09, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: We study conditions under which optimal policy experimentation can be implemented by a committee. We consider a dynamic bargaining game in which committee members choose to implement either a risky reform or a safe alternative with known returns each period. We find that when no redistribution is allowed the unique equilibrium outcome is generically inefficient. When committee members are allowed to redistribute resources (even arbitrarily small amounts), there always exists an equilibrium that supports optimal experimentation for any voting rule with no 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 constraints on redistribution.

Keywords: voting; redistribution; policy experimentation (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-des, nep-dge, nep-gth, nep-mic and nep-pol
Date: 2018-09
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Working Paper: Policy Experimentation, Redistribution and Voting Rules (2018) Downloads
Working Paper: Policy Experimentation, Redistribution and Voting Rules (2018) Downloads
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