Good and Bad Consistency in Regulatory Decisions
We examine sources of consistent regulatory decisions in a model where regulators respond to mixed incentives, including career concerns. In the reference case, regulators act as "public servants" who strive to make the socially optimal decision, given limited information and the opportunity to observe the prior decision of another regulator. Adding career concerns, such as a desire to avoid controversy or to implement a future employer’s preferred policy, tends to reduce the degree of differentiation in sequentially taken decisions, hence increasing consistency. Thus, it is possible to observe that the self-interested career concerns of regulators give rise to consistency in regulatory decision-making. This type of consistency might lead to substantial deviations from optimal regulatory policies.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 7 3365 6570
Fax: +61 7 3365 7299
Web page: http://www.uq.edu.au/economics/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Levine & John Stern & Francesc Trillas, 2005. "Utility price regulation and time inconsistency: comparisons with monetary policy," Oxford Economic Papers, Oxford University Press, vol. 57(3), pages 447-478, July.
- Walter J. Primeaux, Jr. & Patrick C. Mann, 1986. "Regulator Selection Methods and Electricity Prices," Land Economics, University of Wisconsin Press, vol. 62(1), pages 1-13.
- Stephen Coate & Timothy Besley, 2000.
"Elected versus Appointed Regulators: Theory and Evidence,"
NBER Working Papers
7579, National Bureau of Economic Research, Inc.
- Timothy Besley & Stephen Coate, 2003. "Elected Versus Appointed Regulators: Theory and Evidence," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1176-1206, 09.
- Besley, Timothy J. & Coate, Stephen, 2000. "Elected Versus Appointed Regulators: Theory And Evidence," CEPR Discussion Papers 2381, C.E.P.R. Discussion Papers.
- Christopher R. Knittel, 2003. "Market Structure and the Pricing of Electricity and Natural Gas," Journal of Industrial Economics, Wiley Blackwell, vol. 51(2), pages 167-191, 06.
- Dale Lehman & Dennis Weisman, 2000. "The Political Economy of Price Cap Regulation," Review of Industrial Organization, Springer, vol. 16(4), pages 343-356, June.
- Semih Koray & Ismail Saglam, 2005. "The Need for Regulating a Bayesian Regulator," Journal of Regulatory Economics, Springer, vol. 28(1), pages 5-21, 07.
- Troy Quast, 2006.
"Do Elected Public Utility Commissioners Behave More Politically than Appointed Ones?,"
0603, Sam Houston State University, Department of Economics and International Business.
- Troy Quast, 2008. "Do elected public utility commissioners behave more politically than appointed ones?," Journal of Regulatory Economics, Springer, vol. 33(3), pages 318-337, June.
- Clare Leaver, 2007. "Bureaucratic Minimal Squawk Behavior: Theory and Evidence from Regulatory Agencies," Economics Series Working Papers 344, University of Oxford, Department of Economics.
- Robert Breunig & Jeremy Hornby & Scott Stacey & Flavio Menezes, 2006. "Price Regulation in Australia: How Consistent Has It Been?," The Economic Record, The Economic Society of Australia, vol. 82(256), pages 67-76, 03.
When requesting a correction, please mention this item's handle: RePEc:qld:uq2004:376. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SOE IT)
If references are entirely missing, you can add them using this form.