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Published March 1993 | public
Journal Article

Two-sided uncertainty in the monopoly agenda setter model


We extend the Romer-Rosenthal model of representative democracy to a signaling environment, in which (i) only the representatives knows the 'status quo' outcome resulting if her take-it-or-leave-it policy proposal is rejected by the voters, while (ii) only the voters know their true preferences over policies. A separating sequential equilibrium is shown to exist, and to uniquely satisfy a common equilibrium refinement. Furthermore, this equilibrium has the property that, relative to the environment where the status quo is known to the voter, there is a downward bias in the setter's proposal, and an associated upward bias in the probability of the proposal's acceptance by the voter.

Additional Information

© 1993 Elsevier B.V. Received May 1990, revised version received January 1992. I wish to thank two referees for numerous constructive criticisms and suggestions, and the National Science Foundation and the Sloan Foundation for generous financial support.

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