  The need for a circumscriptive formalism that allows for simple yet elegant
modular problem representation has led Lifschitz (AIJ, 1995) to introduce
nested abnormality theories (NATs) as a tool for modular knowledge
representation, tailored for applying circumscription to minimize exceptional
circumstances. Abstracting from this particular objective, we propose L_{CIRC},
which is an extension of generic propositional circumscription by allowing
propositional combinations and nesting of circumscriptive theories. As shown,
NATs are naturally embedded into this language, and are in fact of equal
expressive capability. We then analyze the complexity of L_{CIRC} and NATs, and
in particular the effect of nesting. The latter is found to be a source of
complexity, which climbs the Polynomial Hierarchy as the nesting depth
increases and reaches PSPACE-completeness in the general case. We also identify
meaningful syntactic fragments of NATs which have lower complexity. In
particular, we show that the generalization of Horn circumscription in the NAT
framework remains CONP-complete, and that Horn NATs without fixed letters can
be efficiently transformed into an equivalent Horn CNF, which implies
polynomial solvability of principal reasoning tasks. Finally, we also study
extensions of NATs and briefly address the complexity in the first-order case.
Our results give insight into the ``cost'' of using L_{CIRC} (resp. NATs) as a
host language for expressing other formalisms such as action theories,
narratives, or spatial theories.
