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Regulation 2.0: The Marriage of New Governance and Lex Informatica

45 Pages Posted: 11 Mar 2016 Last revised: 15 Jun 2017

Abbey Stemler

Indiana University - Kelley School of Business - Department of Business Law

Date Written: March 10, 2016

Abstract

Throughout history, disruptive technologies have transformed industry and signaled the destruction or creation of regulatory structures. When crafting regulations, governments often utilize Regulation 1.0 approaches, characterized by top-down design standards that dictate exactly how the regulated must act in order to prevent market failures. Regulation 1.0 increases barriers to entry and decreases the room for business experimentation. Regulation 2.0, by contrast, is a theoretical approach for regulating companies that rely on platform-mediated networks. It marries New Governance theory and the concept of lex informatica. This marriage allows for the collaborative creation of design standards that are then enforced through mediating technologies. Regulation 2.0 is ideal for regulating the sharing economy in particular, as it is powered by technology-driven feedback loops. The shift from Regulation 1.0 to Regulation 2.0 will help regulators meaningfully collaborate with stakeholders and complete the heavy lifting required to effectively turn code into law and efficiently achieve the desired ends of regulation.

Keywords: Sharing Economy, New Governance, Regulation, Airbnb, Uber, Lex Informatica, Reputation Systems

Suggested Citation

Stemler, Abbey, Regulation 2.0: The Marriage of New Governance and Lex Informatica (March 10, 2016). Vanderbilt Journal of Entertainment & Technology Law, Vol. 19, No. 1, 2017; Kelley School of Business Research Paper No. 16-25. Available at SSRN: https://ssrn.com/abstract=2746229

Abbey Stemler (Contact Author)

Indiana University - Kelley School of Business - Department of Business Law ( email )

Bloomington, IN 47405
United States

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