We extend the economic theory of regulation to allow for strategic self-regulation that preempts political action. When … toxic chemicals shows that an increased threat of regulation (as proxied by increased membership in conservation groups …) indeed induces firms to reduce toxic releases. We establish conditions under which self-regulation, if it occurs, is a Pareto …

. Neither in theory nor in practice is there any doubt regarding the economic rationale and the necessity for regulation in the … financial industry. Basically, bank regulation is justified as a means of preventing potential market failures in the financial …, their cost has to be considered, too. In fact, it is only if the overall benefits of regulation exceed its cost that …