Dynamic Legislative Policy Making

No WP45, Wallis Working Papers from University of Rochester - Wallis Institute of Political Economy

Abstract: We prove existence of stationary Markov perfect equilibria in an infinite-horizon model of legislative policy making in which the policy outcome in one period determines the status quo in the next. We allow for a multidimensional policy space and arbitrary smooth stage utilities. We prove that all such equilibria are essentially in pure strategies and that proposal strategies are differentiable almost everywhere. We establish upper hemicontinuity of the equilibrium correspondence, and we derive conditions under which each equilibrium of our model determines a unique invariant distribution characterizing long run policy outcomes. We illustrate the equilibria of the model in a numerical example of policy making in a single dimension, and we discuss extensions of our approach to accommodate much of the institutional structure observed in real-world politics.

Pages: 45 pages
Date: 2007-05
New Economics Papers: this item is included in nep-cdm, nep-dge and nep-pol
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Citations: View citations in EconPapers (22)

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Journal Article: Dynamic legislative policy making (2012)
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