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Self-regulating organizations under the shadow of governmental oversight: An experimental investigation

Author

Listed:
  • Silvester Van Koten

    () (CERGE-EI and Department of Institutional Economics, University of Economics, Prague)

  • Andreas Ortmann

    (School of Economics, the University of New South Wales)

Abstract

Self-regulatory organizations (SROs) can be found in education, healthcare, and other not-for-profit sectors as well as the accounting, financial, and legal professions. DeMarzo et al. (2005) show theoretically that SROs can create monopoly market power for their affiliated agents, but that governmental oversight, even if less efficient than oversight by the SRO, can largely offset the market power. We provide an experimental test of this conjecture. For carefully rationalized parameterizations and implementation details, we find that the predictions of DeMarzo et al. (2005) are borne out.

Suggested Citation

  • Silvester Van Koten & Andreas Ortmann, 2013. "Self-regulating organizations under the shadow of governmental oversight: An experimental investigation," Discussion Papers 2013-13, School of Economics, The University of New South Wales.
  • Handle: RePEc:swe:wpaper:2013-13
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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2013-13.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Experimental Economics; Self-regulating organizations; Governmental oversight;

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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