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Date
2013-10Type
- Working Paper
ETH Bibliography
yes
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Abstract
We analyze the consequences of activism in a regulated industry where the regulator has been captured by the industry. Unlike ordinary economic agents, activists are insensitive to monetary incentives. Moreover, they are less well informed than regulators and their actions generate dead-weight costs. Yet we find that activism may increase social welfare because it disciplines captured regulators and reduces the social cost of imperfect regulatory systems. Show more
Publication status
publishedJournal / series
CESifo Working PapersVolume
Publisher
CESifoSubject
Public regulation; Regulatory capture; Pro-industry bias; Private politics; ActivismOrganisational unit
03635 - Bretschger, Lucas (emeritus) / Bretschger, Lucas (emeritus)
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ETH Bibliography
yes
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