Despite decades of research on mechanism design and on many practical aspects of cost-benefit analysis, one of the most basic and ubiquitous features of regulation as actually implemented throughout the world has received little theoretical attention: exemptions for small firms. These firms may...

Calls for benefit-cost analysis in rule-making based on the Dodd-Frank Wall Street Reform Act have revealed a paucity of work on allocative efficiency in financial markets. We propose three principles to help fill this gap. First, we highlight the need to quantify the "statistical cost of a...

Cost-benefit analysis (“CBA”) has faced significant opposition during most of its tenure as an influential agency decisionmaking tool. As advancements have been made in CBA practice, especially in more complete monetization of relevant effects, CBA has been gaining acceptance as an essential...

Financial regulators should use cost-benefit analysis (CBA) to evaluate financial regulations. Finance is an ideal domain for CBA because the direct costs and benefits of financial activity can be easily monetized, and a huge amount of data exists for calculating the relevant valuations. John...

Many regulators have concluded that cost-benefit analysis is the best available method for capturing the welfare effects of regulations. It is therefore understandable that in recent years, some people have been interested in requiring financial regulators to engage in careful cost-benefit...

Should Congress enact a formal cost-benefit analysis requirement for financial regulation? I survey the nature of costs and benefits of financial regulation, both “macro” regulation designed to stop crises and “micro” regulation of products, markets, and institutions. Although I find...

Some members of Congress, the D.C. Circuit, and legal academia are promoting a particular, abstract form of cost-benefit analysis for financial regulation: judicially enforced quantification. How would CBA work in practice, if applied to specific, important, representative rules, and what is the...

Some members of Congress, the D.C. Circuit, and legal academia are promoting a particular, abstract form of cost-benefit analysis for financial regulation: judicially enforced quantification. How would CBA work in practice, if applied to specific, important, representative rules, and what is the...

The net effect of policies to reduce harm to potential victims is sometimes much smaller than the predicted effect because of failure to account for victim offsetting behavior (OB). A simple expected accident loss model is developed where one parameter, the coefficient of diminishing returns,...