IDEAS home Printed from https://ideas.repec.org/a/bla/scandj/v119y2017i3p571-596.html

A Theory of Soft Capture

Author

Listed:
  • Per J. Agrell
  • Axel Gautier

Abstract

In this paper, we propose an alternative model for capture that is based not on reciprocity but on congruence of interests between the firm and the regulator. A regulator is charged by a political principal to provide an imperfect signal for the type of a regulated firm. Only the firm can observe its type, and the production of a signal is costly. The firm can provide a costless alternative signal of lower accuracy to the regulator. In a self‐enforcing equilibrium, the regulator transmits the firm‐produced signal and saves information‐gathering costs, and the firm enjoys higher information rents.

Suggested Citation

  • Per J. Agrell & Axel Gautier, 2017. "A Theory of Soft Capture," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 571-596, July.
    • Handle: RePEc:bla:scandj:v:119:y:2017:i:3:p:571-596
    DOI: 10.1111/sjoe.12171
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/sjoe.12171
    Download Restriction: no
    File URL: https://libkey.io/10.1111/sjoe.12171?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Justin Rex, 2020. "Anatomy of agency capture: An organizational typology for diagnosing and remedying capture," Regulation & Governance, John Wiley & Sons, vol. 14(2), pages 271-294, April.
    2. Lindemann, Henrik, 2015. "Does Regulatory Independence Translate into a Higher Degree of Liberalization? - Evidence from EU Energy Regulators," Hannover Economic Papers (HEP) dp-545, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Per J. Agrell & Axel Gautier, 2012. "Rethinking Regulatory Capture," Chapters, in: Joseph E. Harrington Jr & Yannis Katsoulacos (ed.), Recent Advances in the Analysis of Competition Policy and Regulation, chapter 14, Edward Elgar Publishing.
    4. Lindemann, Henrik, 2015. "Budgetary Interests and the Degree of Unbundling in Electricity Markets - An Empirical Analysis for OECD Countries," Hannover Economic Papers (HEP) dp-543, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. Elise S. Brezis, 2023. "Regulating the Revolving Door of Regulators: Legal vs. Ethical Issues," Economies, MDPI, vol. 12(1), pages 1-13, December.
    6. Lindemann, Henrik, 2015. "Regulatory Objectives and the Intensity of Unbundling in Electricity Markets," Hannover Economic Papers (HEP) dp-544, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:scandj:v:119:y:2017:i:3:p:571-596. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.