The Irrationality of Reinventing the Wheel: Targeted Learning, Following, and Policy Borrowing in Legal Response.

This paper models an actor’s policy making tactics when others are facing the same challenges. It focuses on the ways they can learn from or follow others to navigate complexity. I have initially applied this model to firms’ responses to ambiguous legal changes in order to provide leverage on legal impact questions. It applies to other situations including policy choice in state legislatures and regulatory agencies as well. I assume that mappings from policies to outcomes are uncertain and that it is costly to learn the mapping to enact an optimal policy. I also assume that this uncertain mapping is partially invertible. (I model the uncertainty as Brownian motion) Observing another’s policy choice and outcome, an actor knows how well this policy will meet its needs, and in which direction to move to get closer. I derive conditions for when an actor will learn from another and how they will learn. Choices of who to learn from, and whether to simply adopt another’s policy, or attempt to alter it to better meet one’s own goals will depend on the complexity of the issue, and the traits of the other actors. This model yields predictions about learning, policy interdependence, and diffusion in legal response and other settings. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]