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on Law and Economics |
| By: | Bruce Owen (Stanford University) |
| Abstract: | There are varied models of regulatory agency behavior. Economists have recently emphasized the incentive-incompatibility of agencies “captured” by regulated entities and a legislature concerned with welfare maximization. This conflict is characterized as a principal-agent problem to which the legislature responds in various ways, including the imposition of administrative procedure laws, oversight committees, and other attempts to control the regulatory bureaucracies. I argue that the principal-agent incentive compatibility model of regulatory capture is naïve. Regulatory agencies are, in general, eager to please or at least appease their congressional oversight and budget committees. It is the committees themselves, and especially their chairs, who capture and are captured by regulated entities, with the objective of funding expensive election campaigns in return for access to a seat at the regulatory policy negotiating table. The existence of the regulatory state and the details of regulatory policy reflect this systemic bias in the political system, which Lawrence Lessig has recently tagged “Type 2” (lawful) corruption. |
| Keywords: | regulation, administrative agency, administrative law, capture theory, political economy, agency behavior, communications policy, Federal Communications Commission (FCC) |
| JEL: | K23 L38 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:sip:dpaper:11-006&r=law |
| By: | Jovanovic, Dragan; Wey, Christian |
| Abstract: | We analyze the efficiency defense in merger control. First, we show that the relationship between exogenous efficiency gains and social welfare can be non-monotone. Second, we consider both endogenous mergers and endogenous efficiencies and find that merger proposals are largely aligned with a proper social welfare analysis which explicitly considers the without merger counterfactual. We demonstrate that the merger specificity requirement does not help much to select socially desirable mergers; to the contrary, it may frustrate desirable mergers inducing firms not to claim efficiencies at all. -- |
| Keywords: | Horizontal Mergers,Efficiency Defense,Merger Specific Efficiencies |
| JEL: | K21 L13 L41 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:64&r=law |
| By: | Philip A. Curry (Department of Economics, University of Waterloo); Matthew Doyle (Department of Economics, University of Waterloo) |
| Abstract: | There exists a large literature on the optimal deterrence of crime. Within the literature, however, there exists a controversy over what the appropriate criterion to determine optimality should be. While the most popular method is that of maximization of a utilitarian welfare function, another criterion sometimes used is that of cost minimization. The controversy stems from the question of whether the benefits to crime enjoyed by criminals ought to be included in the welfare analysis. This paper argues that the controversy is an artifact of the fact that the standard model restricts a potential criminal's choice to one of committing a crime or doing nothing. We show that when potential criminals are given the additional choice of achieving their ends through voluntary methods that maximizing the sum of utilities is in fact equivalent to minimizing the costs of crime. The model developed also provides explanations for sanctions that increase in one's criminal history and why necessity may be a partial defense. |
| JEL: | K42 D6 H0 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:wat:wpaper:1205&r=law |