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*Cost of relocating made up of general cost and sector specific cost
'''Story:''' Two sectors of the economy -> Reform will change make one sector's workers better off and the other worse off, but overall a majority better off -> individuals don't know their cost of switching draws and so don't know if they can switch -> worker in the sector that is made worse off may vote against the reform even though they could pay the switching cost and be made better off by the reform.
*Open rule/Closed rule
*Beliefs (perfect Bayesian)
*Inefficient overspecialization
*Endogenous specialization
*Endogenous choice of proceedure
'''Assumptions:'''
*Outcome is linear in policy and state of the world
*Utilities are negative quadratic about ideal points
*The informed party (the committee) has an ideal point greater than the decision making party (the floor)
'''Story:''' One party can specialize at a cost and learn the true state of the world -> Another party (with different preferences) makes the decisions and set the proceedural rules (open vs. closed) -> Supposing open and no specialization, then no information is learnt and an expectation is used as a posterior; Supposing open and specialization then partitions can be used to communicate some information as in a cheap talk model; Supposing closed and no specialization, the committee can force the agenda relative to the status quo; and for closed with specialization there is perfect communications for extreme values and noisy signalling for non-extreme values. Over specialization is possible.
===[[Ting (2009) - Organizational Capacity |Ting (2009)]]===
'''Keywords:'''
*Specialization
*Fungible investments - Generalized capacity
*Specialized capacity
*Inefficient overinvestment
'''Assumptions:'''
*Complete and perfect information
*Two stages, solved by SPNE
*Particular assumptions on the utility functions cross partials - see the paper
'''Story:''' There are two versions of the game, the generalized capacity version and the specialized capacity version. The difference is solely in whether the capacity can be appropriated by the decision maker for any policy, or is specifically bound the policy announced by the agent. In the GC game: The agent chooses a capacity -> the principal chooses a period 1 policy, and then a period 2 policy and capacity that can't exceed the period 1 capacity -> Agents incur a cost for specializing and principals and agents both get utility from policies close to their ideal points -> In the GC game the principal appropriates the capacity for his own purposes, in the SC game the agent strategically invests in certain policies to get the principal to use them (and benefit from the capacity) rather than throw them out and use his own capacity-less policy.
