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Gilligan Krehbiel (1987) - Collective Decision Making And Standing Committees (view source)
Revision as of 18:57, 30 September 2011
, 18:57, 30 September 2011→Open rule, no specialization
===Open rule, no specialization===
<b>PROPOSITION 1</b>: The equilibrium is:
:<math>b^* \in P, \quad p*(b) = -\overline{\omega}, \quad g^*(b) = \{w|w \in [0,1]\}\,</math>
This is found by taking <math>\mathbb{E}u_f = \mathbb{E}(-(\overline{\omega}+\omega)^2) = -(\mathbb{E}(\omega^2)-\overline{\omega}^2) = -\sigma_{\omega}^2\,</math>. And likewise for the committee. Note that both have informational losses, and the committee has a distributional loss.
<b>Proof of Prop 1</b> (same as above): <math>g^{\ast}(b)=\{w\in [0,1]\}</math> since b is not a function of w since c does not observe w. 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>.
Outcomes are Pareto Optimal iff:
:<math>\omega \in [\overline{\omega}, x_c + \overline{\omega}]\,</math>
<b>Comments</b>: 1) No information transmission, 2) Leads to "info losses" for both the floor and committee, 3) Risk aversion, 4) Incomplete (by which I think he means <i>asymmetric</i>) info is not relevant, 5) Committee plays no role.
===Open rule, specialization===
