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A Graphical Exposition of the Economic Theory of Regulation
Author(s) -
Beard T. Randolph,
Kaserman David L.,
Mayo John W.
Publication year - 2003
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/cbg030
Subject(s) - exposition (narrative) , economics , normative , variety (cybernetics) , deregulation , subsidy , construct (python library) , social welfare , microeconomics , neoclassical economics , positive economics , public economics , macroeconomics , computer science , political science , law , market economy , art , literature , artificial intelligence , programming language
This article provides a novel graphical exposition of the economic theory of regulation. In particular, we show—within a single graphical construct—a number of features that emerge from the theory. Through a variety of applications we are able to provide an improved understanding of many questions that have vexed economists, including the markets likely to be chosen for regulation, the propensity of regulatory benefits to be spread across interest groups, the symbiotic nature of regulation and cross‐subsidization, and the economics of deregulation. We also are able to depict graphically the relationship between the economic theory of regulation and the traditional normative model of regulation, which assumes that regulators maximize social welfare. (JEL D72 , L51 )