Law and Economics

9.

The Economics of Regulation

9.1.

Theories of Regulation

9.1.1.

Public Interest Theory

9.1.1.1.

Market Failure Correction

9.1.1.2.

Social Welfare Maximization

9.1.2.

Private Interest Theory

9.1.2.1.

Regulatory Capture

9.1.2.2.

Rent-Seeking Behavior

9.1.3.

Economic Theory of Regulation

9.1.3.1.

Supply and Demand for Regulation

9.2.

Market Failures and Regulation

9.2.1.

9.2.1.1.

Negative Externalities

9.2.1.2.

Positive Externalities

9.2.1.3.

Regulatory Solutions

9.2.2.

9.2.2.1.

Non-Rivalry and Non-Excludability

9.2.2.2.

Government Provision

9.2.3.

Natural Monopoly

9.2.3.1.

Economies of Scale

9.2.3.2.

Regulation of Essential Services

9.2.4.

Information Asymmetries

9.2.4.1.

Consumer Protection

9.2.4.2.

Disclosure Requirements

9.3.

Regulatory Tools

9.3.1.

Price Regulation

9.3.1.1.

9.3.1.2.

9.3.1.3.

Rate-of-Return Regulation

9.3.2.

Quantity Controls

9.3.2.1.

9.3.2.2.

9.3.2.3.

Entry Restrictions

9.3.3.

Quality and Safety Standards

9.3.3.1.

Product Standards

9.3.3.2.

Service Standards

9.3.3.3.

Compliance Costs

9.3.4.

Taxes and Subsidies

9.3.4.1.

Pigouvian Taxes

9.3.4.2.

Corrective Subsidies

9.3.4.3.

Revenue Effects

9.4.

Cost-Benefit Analysis in Regulation

9.4.1.

Valuing Costs and Benefits

9.4.1.1.

Monetary Valuation

9.4.1.2.

Non-Market Valuation

9.4.2.

Valuing Human Life and Health

9.4.2.1.

Statistical Value of Life

9.4.2.2.

Quality-Adjusted Life Years

9.4.3.

9.4.3.1.

Time Preference

9.4.3.2.

9.4.3.3.

Intergenerational Effects

9.4.4.

Uncertainty and Risk Assessment

9.4.4.1.

Probabilistic Analysis

9.4.4.2.

Sensitivity Analysis

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