A theory advanced in regulatory hearings holds that market performance will be improved if one side of the market is forced to publicly reveal preferences. For example, wholesale electricity producers claim that retail electricity consumers would pay lower prices if wholesale public utility...

Evidence suggests that individuals often comply with regulations even though the frequency of inspections and audits is low. We report a laboratory experiment based on the dynamic model suggested by Harrington (1988) to explain this puzzle in which participants move between two inspection groups...