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The Value of Information in Regulation


  • Magesan Arvind

    () (University of Toronto)

  • Turner Matthew A

    () (University of Toronto)


This paper considers the problem of an imperfectly informed regulator constrained in his choice of environmental regulation by the political opposition of those affected by the policy. We compare the value of two types of information to the regulator: the social cost of pollution and the profitability of firms present in the economy. We find that in environments where small increases in the losses to regulated firms greatly affect the regulator's ability to implement the policy, it is most valuable to learn the types of firms whereas it is most valuable to learn the social cost of pollution when small increases in losses are relatively ineffectual.

Suggested Citation

  • Magesan Arvind & Turner Matthew A, 2010. "The Value of Information in Regulation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-30, August.
  • Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:76

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    References listed on IDEAS

    1. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, July.
    2. Gene M. Grossman & Elhanan Helpman, 2002. "Special Interest Politics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571676, July.
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    Cited by:

    1. Häggquist, Elisabeth & Söderholm, Patrik, 2015. "The economic value of geological information: Synthesis and directions for future research," Resources Policy, Elsevier, vol. 43(C), pages 91-100.

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