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Sectoral Regulators and the Competition Authority: Which Relationship is Best?

Author

Listed:
  • Pedro P. Barros

    () (Nova School of Business and Economics
    CEPR)

  • Steffen H. Hoernig

    (Nova School of Business and Economics)

Abstract

Abstract We consider the interplay between regulatory agencies with overlapping competencies: for example, a competition authority and a sectoral regulator. This reflects the current situation in the European Union and in the US. We analyse how authorities’ incentives to act are affected if they can decide independently, or must follow each others’ opinions, respectively, and consider how this relationship performs in the presence of institutional biases and lobbying efforts. A higher likelihood of closing a case tends to be achieved when the authorities act independently of each other: the probability of coming to a decision is higher, and decisions are less vulnerable to lobbying.

Suggested Citation

  • Pedro P. Barros & Steffen H. Hoernig, 2018. "Sectoral Regulators and the Competition Authority: Which Relationship is Best?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(3), pages 451-472, May.
  • Handle: RePEc:kap:revind:v:52:y:2018:i:3:d:10.1007_s11151-017-9582-z
    DOI: 10.1007/s11151-017-9582-z
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    References listed on IDEAS

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    1. Jean-Jacques Laffont & David Martimort, 1999. "Separation of Regulators Against Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 232-262, Summer.
    2. Ryan Bubb & Patrick L. Warren, 2014. "Optimal Agency Bias and Regulatory Review," The Journal of Legal Studies, University of Chicago Press, vol. 43(1), pages 95-135.
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    4. 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, May.
    5. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 243-277, Fall.
    6. Martimort, David, 1996. "The multiprincipal nature of government," European Economic Review, Elsevier, vol. 40(3-5), pages 673-685, April.
    7. David P. Baron, 1988. "Regulation and Legislative Choice," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 467-477, Autumn.
    8. Thomas P. Gehrig, 2004. "Organizational Form and Information Acquisition," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(1), pages 1-39, March.
    9. Canice Prendergast, 2007. "The Motivation and Bias of Bureaucrats," American Economic Review, American Economic Association, vol. 97(1), pages 180-196, March.
    10. Pedro P. Barros & Steffen Hoernig & Tore Nilssen, 2015. "Transversal Agency and Crowding Out," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(4), pages 589-608, December.
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    Citations

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    Cited by:

    1. Barros, Pedro Luis Pita & Hoernig, Steffen & Nilssen, Tore, 2008. "Keeping Both Eyes Wide Open: The Life of a Competition Authority Among Sectoral Regulators," CEPR Discussion Papers 6861, C.E.P.R. Discussion Papers.
    2. Thibaud Vergé & Estelle Malavolti-Grimal & Frédéric Loss, 2007. "Comment décentraliser la politique européenne de concurrence ?," Économie et Prévision, Programme National Persée, vol. 178(2), pages 115-124.
    3. International Monetary Fund, 2007. "Italy—Assessing Competition and Efficiency in the Banking System," IMF Working Papers 07/26, International Monetary Fund.
    4. Pedro P. Barros & Steffen Hoernig & Tore Nilssen, 2015. "Transversal Agency and Crowding Out," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(4), pages 589-608, December.
    5. Fumagalli, Eileen & Vasconcelos, Helder, 2006. "Cross-Border Merger Waves," CEPR Discussion Papers 5601, C.E.P.R. Discussion Papers.
    6. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.

    More about this item

    Keywords

    Competition authority; Sectoral regulators; Institutional relationship; Strategic substitutes and Complements; Lobbying;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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