Plausibility of Signals by a Heterogeneous Committee

Abstract

Krishna and Morgan propose “amendments” to two of Gilligan and Krehbiel’s theoretical studies of legislative signaling. The new results for homogeneous committees do not significantly change the empirical expectations of prior works, but the results for heterogeneous committees contradict earlier claims. This note gives primary attention to heterogeneous committees and compares and contrasts the new and old equilibria and their empirical implications. The notion of signaling is somewhat nebulous in all such games but seems distinctly less plausible in the key Krishna-Morgan proposition than in previous legislative signaling games. Furthermore, the empirical literature on choice of rules—specifically, the finding of a positive relationship between committee heterogeneity and restrictive rules—is inconsistent with the Krishna-Morgan analysis but consistent with Gilligan-Krehbiel analyses, even though the former is informationally efficient and the latter are not.