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Keeping Both Eyes Wide Open: The Life of a Competition Authority Among Sectoral Regulators

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Author Info
Hoernig, Steffen
Nilssen, Tore
Pita Barros, Pedro Luis

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Abstract

Competition authorities must pay attention to many industries simultaneously. Sectoral regulators concentrate on their own industry. Often both types of authority may intervene in specific industries and there is an overlap of jurisdictions. We show how a competition authority’s resource allocation is affected by its relationships with sectoral regulators and their biases. If agencies collaborate (compete), the competition authority spends more effort on the industry with the more (less) consumer-biased sectoral regulator. The competition authority spends budget increases on the industry whose regulator reacts less to more effort. The socially optimal budget corrects for distortions due to regulatory bias, but only downwards.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6861.

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Date of creation: Jun 2008
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Handle: RePEc:cpr:ceprdp:6861

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Related research
Keywords: Competition authority Regulatory bias Sectoral regulators

Find related papers by JEL classification:
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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This page was last updated on 2008-10-11.

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