Friday, September 29, 2023 12:00 PM to 1:00 PM EDT
Vernon Smith Hall (formerly Metropolitan Building), 5183
The ICES Seminar in Experimental Economics and Game Theory of the Fall 2023 semester will feature:
Düsseldorf Institute for Competition Economics, Heinrich Heine University Düsseldorf
A Dynamic Theory of Regulatory Capture
Abstract
Firms often try to influence individuals that, like regulators, are tasked with advising or deciding on behalf of a third party. In a dynamic regulatory setting, we show that a firm may prefer to capture regulators through the promise of a lucrative future job opportunity (the revolving-door channel) rather than through a hidden payment (a bribe). This is because the revolving door publicly indicates the firm’s eagerness and commitment to rewarding lenient regulators, which facilitates collusive equilibria. We find that opening the revolving door conditional on the regulator’s report is usually more efficient than a blanket ban on post-agency employment.
For more information about the Seminar Series, please visit the Seminar Schedule homepage.
