Credence attributes of products are unobservable through search or experience. Some consumers are willing to pay a premium for their provision, and in addition, citizens can apply social pressure on firms to supply credence attributes. Firms have formed voluntary organizations to assure the...

Self-regulation is the private provision of public goods and private redistribution. This paper examines the scope of self-regulation motivated by altruistic moral preferences that are reciprocal and stronger the closer are citizens in a socioeconomic distance. The focus is on the role of...

The article analyzes a model of a regulated firm that is better informed about its cost function than is the regulator. By auditing at a cost, however, the regulator is assumed to be able to observe the realized cost of the firm. If the regulator "finds" that the firm had misrepresented its...

In Special Interest Politics Gene Grossman and Elhanan Helpman examine how special-interest groups influence political outcomes for the benefit of their members. The authors take interest groups seriously by considering a range of theories and supporting evidence on interest group activity....

This paper presents a theory of self-regulation by a firm or an industry acting collectively in the context of private and public politics. In private politics an activist identifies a social issue, makes a demand on the firm, and threatens a harmful campaign. The firm self-regulates to...

Private politics social pressure is led by social activists who use confrontational and cooperative strategies to induce firms to provide social benefits. A confrontational activist demands that a firm change its practices and threatens a harmful campaign if it does not change. A cooperative...