Activists versus Captured Regulators

Julien Daubanes () and Jean Rochet

No 4444, CESifo Working Paper Series from CESifo

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.

Keywords: public regulation; regulatory capture; pro-industry bias; private politics; activism (search for similar items in EconPapers)
JEL-codes: D02 D74 D82 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4444

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