TILEC Seminar: Massimo Morelli (Bocconi University)| Equilibrium Reforms and Endogenous Complexity (joint work with Dana Foarta)

Abstract

Decision makers called to evaluate and approve a reform, proposed by an interest group, a politician, or a bureaucracy, suffer from a double asymmetric information problem: about the competence of the proposer and the consequences of the proposal. Moreover, the ability of decision makers to evaluate proposals depends on the complexity of the legislative environment, itself a product of past reforms. We model the strategic interaction between reformers and decision makers as a function of legislative complexity, and study the dynamics of endogenous complexity and stability of reforms. Complexi cation-simpli cation cycles can occur on the equilibrium path, and expected long-run complexity may be higher when competence of reform proposers is lower. The results apply to regulatory reforms, legislative politics, and institutional design.

Speaker: Massimo Morelli is a Professor at Bocconi University, Fellow of the Econometric Society, Fellow of the Society for the Advancement of Economic Theory, previously professor at Columbia University and EUI, fellow of the Institute for Advanced Study in Princeton, and earlier associate and assistant professor at Ohio State and Iowa State. He obtained his Ph.D. in economics from Harvard University in 1996. His research interests are in game theory, mechanism design, political economy, governance institutions, development economics, behavioral and public economics, comparative politics and international relations.

Time: 10:45-11:45 hrs

Host: Melika Liporace
Moderator: Konrad Borowicz