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'Bribing' regulators

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  • Dennis L. Weisman

Abstract

The regulator's welfare function is a convex combination of consumer surplus, profits shared with the regulator and profits retained by the regulated firm. This analysis seeks to determine the conditions under which the regulated firm is able to 'bribe' the regulator with profit sharing to raise prices and realize positive profits in equilibrium.

Suggested Citation

  • Dennis L. Weisman, 2015. "'Bribing' regulators," Applied Economics Letters, Taylor & Francis Journals, vol. 22(7), pages 581-586, May.
    • Handle: RePEc:taf:apeclt:v:22:y:2015:i:7:p:581-586
    DOI: 10.1080/13504851.2014.959649
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    References listed on IDEAS

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    1. Richard A. Posner, 1971. "Taxation by Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 22-50, Spring.
    2. Kahn, Alfred E. & Tardiff, Timothy J. & Weisman, Dennis L., 1999. "The Telecommunications Act at three years: an economic evaluation of its implementation by the Federal Communications Commission," Information Economics and Policy, Elsevier, vol. 11(4), pages 319-365, December.
    3. Graeme Guthrie, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 925-972, December.
    4. Graeme Guthrie, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 925-972, December.
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