Corporate Design for Regulability. A Principal-Agent-Supervisor Model
AbstractCorporate actors differ from individuals in one important respect: technically, it may be possible to observe the formation of the corporate will from outside, and to impact on its formation. This feature can be exploited by regulators. One technology is inducing corporate actors to hire an interface actor, representing the regulatory cause at the interior of the firm. Regulators are corporate actors as well. Statutes usually do not fully determine their behaviour. Therefore, firms may induce the regulator to give an interface actor access to the regulatory arena. This interface actor has the task of representing the commercial cause in regulatory decision-making. The paper uses a principal-agent-supervisor model to analyse each of these cases separately, and to demonstrate how the reciprocal nature of the relationship may be exploited.
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Bibliographic InfoPaper provided by Max Planck Institute for Research on Collective Goods in its series Working Paper Series of the Max Planck Institute for Research on Collective Goods with number 2005_15.
Length: 29 pages
Date of creation: Sep 2005
Date of revision:
principal-agent-supervisor; corporate actor; corporate governance; regulatory procedure; governance; interface actor;
Other versions of this item:
- Christoph Engel, 2006. "Corporate Design for Regulability: A Principal-Agent-Supervisor Model," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 162(1), pages 104-124, March.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
- K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-09-18 (All new papers)
- NEP-COM-2005-09-19 (Industrial Competition)
- NEP-LAW-2005-09-20 (Law & Economics)
- NEP-MIC-2005-09-19 (Microeconomics)
- NEP-REG-2005-09-19 (Regulation)
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- Christoph Engel, 2006. "The Difficult Reception of Rigorous Descriptive Social Science in the Law," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2006_1, Max Planck Institute for Research on Collective Goods.
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