Policy Experimentation in Committees: a Case Against Veto Rights Under Redistributive Constraints

Abstract : We study optimal policy experimentation by a committee. We consider a dynamic bargaining game in which committee members choose either a risky reform or a safe alternative each period. When no redistribution is allowed the unique equilibrium outcome is generically inefficient. When redistribution is allowed (even small amounts), there always exists an equilibrium that supports optimal experimentation for any voting rule without veto players. With veto players, however, optimal policy experimentation is possible only with a sufficient amount of redistribution. We conclude that veto rights are more of an obstacle to optimal policy experimentation than the constraints on redistribution themselves.

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An Economic Theory of Information

Abstract : We develop a formal model that expands, and in the process radically alters the basic Walrasian model, by incorporating costly information into it. In the Walrasian model, where information is costless, actors in the market are consumers and producers and prices are all they react to. Moreover, property rights are well-defined and there is no dissipation. In our model information is costly and this changed assumption does not merely add a third axis to the traditional two. Rather, costly information affects the contents of the two variables. For instance, changes in information cost affect the supply function via the decision to switch from producing for the market to producing within the firm. Regarding consumption, consumers require information to learn about the existence of commodities, their quality and their prices, thus affecting the consumption function. The costliness of information implies that transaction costs are positive and property rights are not well-defined. As an additional result of the costliness of information, besides buyers and sellers, also emerging are intermediaries. In our model, beside buying and selling, the parties engage in activities that include measuring, deception, waiting in line, erecting fences, establishing reputation and guaranteeing, all of which are absent from the Walrasian model. Whereas property rights are not well defined, the parties act so as to minimize the dissipation. Our model enables us to make predictions regarding such phenomena as the change in the make-up of hamburgers as we move from buying them in supermarkets to buying them for take-outs to buying them in restaurants where land rent is cheap and in ones where land rent is expensive. It also makes predictions regarding intermediation and horizontal and vertical integration. The usefulness of our model is demonstrated by recognizing that the Walrasian model is incapable of making many of the predictions we are able to derive from our model.

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Dynamic Analysis of Archives Contents: the Case of the Isnie/sioe Intellectual History

Abstract : The purpose of this paper is to present the methodology we have been developing to explore the thematic structure of a collection of texts and its dynamic without an appropriate a priori understanding of the relevant categories and concepts. Since we believe that this methodology is particularly promising for studying the organizational and institutional phenomena thanks to relevant archives or digital tracks, we chose to focus our attention on the “archive” of the Society for Institutional and Organizational Economics (SIOE) that celebrated its 20th anniversary in 2018. This archive comprises the abstracts of more than 3 000 papers that were presented at the 21 annual conferences of the society organized between 1998 and 2018. The dynamic topic modeling of this data highlights two major trends. First, there is over time a reversal of fortune between the study of institutions and the analysis of organizational arrangement that have been being becoming dominant from the 2010’s. Second, within each main domain of investigation, a shift from a broad approach contrasting alternative orders (e.g. market vs. hierarchy, private vs. collective property), to a micro-analytical approach of mechanisms (either contractual, organizational or institutional) can be observed.

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