Abstract
If each legislator wishes to encourage other legislators to address new problems in future periods, then a subgame perfect Nash equilibrium can exist with the following properties: (1) no legislator finds it worthwhile to make a narrow proposal that appeals to a minimum majority; (2) instead, legislators propose policies that appeal to all members, not for fear of retaliation, but rather to encourage other members to work on new problems in succeeding periods; (3) in succeeding periods no legislator amends the existing broad policy. We find an equilibrium with these properties in finite as well as infinite period games.
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We gratefully acknowledge the comments of anonymous referees, Peter Aranson, Nick Baigent, Linda Cohen, Tyler Cowen, Bernard Grofman, Robin Keller, and Neal Stoughton. The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. The views expressed here are those of the authors and do not necessarily reflect the views of the Commission or McMillan's colleagues on the Staff of the Commission.
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Glazer, A., McMillan, H. Amend the old or address the new: Broad-based legislation when proposing policies is costly. Public Choice 74, 43–58 (1992). https://doi.org/10.1007/BF00175210
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DOI: https://doi.org/10.1007/BF00175210