Gilligan Krehbiel (1987) - Collective Decision Making And Standing Committees

• This page is referenced in BPP Field Exam Papers

Reference(s)

Gilligan, T. and K. Krehbiel (1987), Collective Decision-making and Standing Committees: An Informational Rationale for Restrictive Amendment Procedures, Journal of Law, Economics and Organization 3, 287 pdf

Abstract

Specialization is a predominant feature of informed decisionmaking in col- lective bodies. Alternatives are often initially evaluated by standing com- mittees comprised of subsets of the membership. Committee members may have prior knowledge about policies in the committee's jurisdiction or may develop expertise on an ongoing basis. Specialization by committees can be an efficient way for the parent body to obtain costly information about the consequences of alternative policies. Indeed, some scholars have argued persuasively that acquisition of information is the raison d'etre for legislative committees (Cooper).

The Model

There are two bodies:

• A committee
• The legislature, or parent chamber, or 'floor', that uses a majority rule

There are two proceedures:

• [math]P^R\,[/math] is the restrictive proceedure (closed rule) where no amendments are allowed and the policy is voted against the status quo
• [math]P^U\,[/math] is the unrestrictive proceedure (open rule) where the parent body may choose any alternative to the policy.

The outcome ([math]x\,[/math]) is linear in both the policy ([math]p\,[/math]) and random variable ([math]\omega \sim U[0,1]\,[/math], such that [math]\mathbb{E}\omega = \overbar{\omega}\,[/math] and [math]\mathbb{V}\omega = \sigma_{\omega}^2\,[/math]) concerning the state of the world. That is:

[math]x = p+ \omega\,[/math]

Utilities are negative quadratice about ideal points ([math]x_f = 0\,[/math] and [math]x_c \gt 0\,[/math]). The committee can incur a cost [math]k\,[/math] to learn the state of the world if it chooses to specialize ([math]s \in \{0,1\}\,[/math]).

[math]u_f = -(x-x_f)^2 = -x^2\,[/math]

[math]u_c = -(x-x_c)^2 - sk\,[/math]

The sequence of the game is as follows:

1. The floor chooses [math]P \in \{P^U,P^R\}\,[/math] (Note not to be confused with the policy space [math]P) #The committee chooses \lt math\gt s \in \{0,1\}\,[/math] (i.e. symmetric or asymmetric uncertainty)
2. Nature chooses the state of the world [math]\omega \sim U[0,1]\,[/math]
3. The committee reports a bill [math]b \in P \subset R^1\,[/math]
4. The floor updates its beliefs [math]g \in [0,1]\,[/math]
5. A policy is choosen [math]p \in P \subset R^1 \mbox{ if } P^U or \lt math\gt p \in \{p_0,b\} \mbox{ if } P^R\,[/math]
6. There are consequences and payoffs: [math]x, u_f, u_c\,[/math] all determined