Asymmetric Information and Legislative Rules with a Heterogeneous Committee

Abstract

Equilibria are identified for a three-person game theoretic model of a legislature in which two heterogeneous committee members have superior information (vis-a-vis the legislature) about the consequences of policies that fall in their committee's jurisdiction. Equilibria associated with open, modified, and closed rules are each assessed in terms of distributional benefits (which legislators win and at whose expense) and informational efficiency (how much information becomes available in the course of decision making). While the closed rule tends to confer distributional benefits to the proposing committee member at the direct expense of other legislators, the informational efficiency of the closed rule is greater than that for open and modified rules. The findings have implications for the choice of rules governing the consideration of committee's proposals and for the composition of specialized standing committees.