Changes

<b>Proposition 1</b>: For <math><P^{u}|s=0></math>, the legislative equilibrium is: (i) <math>b^{\ast}\in P</math>, (ii) <math>p^{\ast}(b)=-\bar{\omega}=1/2</math>, (iii) <math>g^{\ast}=\{\omega|\omega\in[0,1]\}</math>, and (iv) EU_{f}(P^{U}|s=0)=-\sigma^{2}_{w}</math>, (v) <math>EU_{c}(P^{U}|s=0)=-\sigma_{\omega}^{2}-x_{c}^{2}</math>.

<b>Proof</b>: <math>g^{\ast}(b)=\{w\in [0,1]\}</math> since b is not a function of w since c does not observe w. FLoro FLoor chooses p such that <math>\max_{p}\int_{0}^{1}-(p+w)^{2}f(w)dw, f(w)=1, w\in[0,1]</math>. <b>Comments</b>: 1) No information transmission, 2) Leads to "info losses" for both the floor and committee, 3) Risk aversion, 4) Incomplete info is not relevant, 5) Committee plays no role.