The Open Method of Coordination (OMC) as an Evolutionary Learning Process

41 Pages Posted: 14 Apr 2009

See all articles by Ana B. Ania

Ana B. Ania

University of Vienna

Andreas Wagener

Leibniz Universit├Ąt Hannover - Economics and Business Administration Area; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Vienna University of Economics and Business Administration

Date Written: April 2009

Abstract

We interpret the Open Method of Coordination (OMC), recently adopted by the EU as a mode of governance in the area of social policy and other fields, as an imitative learning dynamics of the type considered in evolutionary game theory. The best-practise feature and the iterative design of the OMC correspond to the behavioral rule "imitate the best." In a redistribution game with utilitarian governments and mobile welfare beneficiaries, we compare the outcomes of imitative behavior (long-run evolutionary equilibrium), decentralized best-response behaviour (Nash equilibrium), and coordinated policies. The main result is that the OMC allows policy coordination on a strict subset of the set of Nash equilibria, favoring in particular coordination on intermediate values of the policy instrument.

Keywords: Open Method of Coordination, Finite-population Evolutionarily Stable Strategy, imitation, mobility, redistribution

JEL Classification: H77, H75, C73

Suggested Citation

Ania, Ana B. and Wagener, Andreas, The Open Method of Coordination (OMC) as an Evolutionary Learning Process (April 2009). CESifo Working Paper Series No. 2601, Available at SSRN: https://ssrn.com/abstract=1379111

Ana B. Ania

University of Vienna ( email )

Department of Economics
Oskar-Morgenstern-Platz 1
Vienna, 1090
Austria
+43-1-427737433 (Phone)
+43-1-42779374 (Fax)

HOME PAGE: http://homepage.univie.ac.at/ana-begona.ania-martinez/

Andreas Wagener (Contact Author)

Leibniz Universit├Ąt Hannover - Economics and Business Administration Area ( email )

Koenigsworther Platz 1
30167 Hannover
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Vienna University of Economics and Business Administration ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

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