Activists versus Captured Regulators

We analyze the consequences of activism in a regulated industry where the regulator has been captured by the industry. Unlike ordinary economic agents, activists are insensitive to monetary incentives. Moreover, they are less well informed than regulators and their actions generate dead-weight costs. Yet we find that activism may increase social welfare because it disciplines captured regulators and reduces the social cost of imperfect regulatory systems.

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Year of publication:	2013
Authors:	Daubanes, Julien ; Rochet, Jean-Charles
Institutions:	CESifo
Subject:	public regulation \| regulatory capture \| pro-industry bias \| private politics \| activism

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Extent:	application/pdf
Series:	CESifo Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 4444
Classification:	D02 - Institutions: Design, Formation, and Operations ; D74 - Conflict; Conflict Resolution; Alliances ; D82 - Asymmetric and Private Information
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010703425