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Grossman Helpman (2001) - Special Interest Politics Chapters 4 And 5 (view source)
Revision as of 18:18, 26 April 2010
, 18:18, 26 April 2010ββThe Model(s)
==The Model(s)==
In general there is a policy maker who choses a policy to implement <math>p\,</math>, based on some facts about the state of the world <math>\theta\,</math>. There is also a Special Interest Group (SIG) who observes the facts about the state of the world but has a bias <math>\delta > 0\,</math>. The utility functions of both types of players are inverse quadratic(i.e. quadratic loss functions).
Utility of the policy maker: