Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89639
Authors: 
Daubanes, Julien
Rochet, Jean-Charles
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4444
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.
Subjects: 
public regulation
regulatory capture
pro-industry bias
private politics
activism
JEL: 
D02
D74
D82
Document Type: 
Working Paper

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