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Effect of the agreement to impose a voluntary export restraint on Japan's auto makers.

SUMMARYThis article leads off a special symposium comprised of a select group of public choice economists and political scientists that assembled to reflect on the important contribution that Arthur T. Denzau and Douglass C. North's seminal piece on Shared Mental Models (1993) has made over the last quarter of a century. Relatedly, we apply concepts from Denzau and North's Shared Mental Models to suggest a modified model of the Nash equilibrium used in non‐cooperative game theory to help us operationalize the "learning path" by which we can move from "siloed" thinking to a wider "systems" view of organizations, our environment, and indeed, the world. Our model has implications for the way we respond to economic crises, financial meltdowns, and global health epidemics, such as the COVID‐19 pandemic.

This paper derives a supply price for public policy using a constrained maximization model. In the model, three sets of agents each have preferences over outcomes: organized interest groups offer campaign contributions to improve their own wealth, voters offer votes to obtain outcomes closer to their most preferred outcomes, and legislators seek both campaign contributions and votes to obtain reelection. A given legislator's supply price for policy is shown to depend on the productivity of his effort, as determined by committee assignments, priority and ability, and by the preferences of his unorganized constituency in the home district. Two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model. The prediction of the model is that interest groups will, in general, seek out legislators whose voters are indifferent to the policy the interest group seeks. Thus, voters who do have preferences over policy are in effect represented, even though they are not organized.