Exceptions to the Rules: Variances from Regulatory Standards

Posted: 21 Jul 2006

See all articles by Anthony M. Marino

Anthony M. Marino

University of Southern California - Marshall School of Business

Abstract

In the major areas of regulation, standards can be violated through an appeal process set up as a part of the statutes. This paper formulates a model of the variance appeal process, characterizes the (perfect Bayesian) equilibria of this procedure and studies the welfare properties of these equilibria. I consider two versions of the decision rule used by the appeal board and suggest institutionally feasible alterations in these rules which can improve equilibrium welfare. I also study how obstructionist interest groups can affect the welfare performance of the decision rules.

Keywords: Regulation, interest groups, Industrial Policy

JEL Classification: L5

Suggested Citation

Marino, Anthony M., Exceptions to the Rules: Variances from Regulatory Standards. Journal of Regulatory Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=918515

Anthony M. Marino (Contact Author)

University of Southern California - Marshall School of Business ( email )

Dept. of Finance & Business Economics
Los Angeles, CA 90089
United States
213-740-6525 (Phone)
213-740-6650 (Fax)

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