The paper provides a tractable, analytical framework to study regulatory risk. Regulatory risk is captured by … funds. Results are as follows: 1) The regulator's reaction to regulatory risk depends on the curvature of aggregate demand …. 2) It yields a positive information rent effect exactly when demand is convex. 3) Firms benefit from regulatory risk …

We study regulation of the auditing profession in a model where audit quality is unobservable and enforcing regulation …

We consider environmental regulation in a context where firms invest in abatement technology under conditions of …

This paper investigates political uncertainty as a source of regulatory risk. It shows that political parties have … incentives to reduce regulatory risk actively: Mutually beneficial pre-electoral agreements that reduce regulatory risk always … skewed. These results follow from a fluctuation effect of regulatory risk that hurts parties and an output-expansion effect …

-of-return regulation is generally thought to result in over investment, while incentive regulation is believed to entail underinvestment …. Yet, previous empirical work has generally found that the introduction of incentive regulation has not systematically …-of-return regulation because investment decisions (what can be included in the rate base) are usually evaluated in a discretionary manner …

Based on an idiosyncratic reading of the literature I propose intermediate (rather than tight or soft) regulation for … balancing investment incentives with allocative efficiency and competition objectives. Intermediate regulation is compatible … with incentive regulation and helps lengthening the regulatory commitment period necessary for incentives. However, such …