A signaling theory of congressional oversight

Charles M. Cameron, B. Peter Rosendorff

    Research output: Contribution to journalArticlepeer-review

    Abstract

    A take-it-or-leave-it bargaining game with asymmetric information and costly signaling is used to examine Congressional supervision (“oversight”) of federal agencies. Hearings signal the resoluteness of the committee-the likelihood that the committee will expend the effort to draft and pass a bill overruling an agency. Two kinds of sequential equilibria exist: a pooling equilibrium, and a set of partial-pooling equilibria in which the receiver is able to distinguish among groups of senders. When the receiver sends its utility-maximizing offer, the sender vetoes with positive probability, and if a compromise offer is sent, it is sent on the assurance of its acceptance. These results resemble patterns in oversight observed in Congress. Journal of Economic Literature Classification Numbers: 025, 026.

    Original languageEnglish (US)
    Pages (from-to)44-70
    Number of pages27
    JournalGames and Economic Behavior
    Volume5
    Issue number1
    DOIs
    StatePublished - Jan 1993

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

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