Sectoral Regulators and the Competition Authority: Which Relationship is Best?
- 94 Downloads
We consider the interplay between regulatory agencies with overlapping competencies: for example, a competition authority and a sectoral regulator. This reflects the current situation in the European Union and in the US. We analyse how authorities’ incentives to act are affected if they can decide independently, or must follow each others’ opinions, respectively, and consider how this relationship performs in the presence of institutional biases and lobbying efforts. A higher likelihood of closing a case tends to be achieved when the authorities act independently of each other: the probability of coming to a decision is higher, and decisions are less vulnerable to lobbying.
KeywordsCompetition authority Sectoral regulators Institutional relationship Strategic substitutes and Complements Lobbying
We would like to thank the editor and an anonymous referee for their suggestions for improving the paper, and Pascal Courty, Abel Mateus, Tore Nilssen, and Karl Schlag for useful comments on earlier versions.
- Castro, R. (2004). Essays on the institutional arrangement between the industry-specific and the antitrust agencies. Dissertation, Universitat Pompeu Fabra.Google Scholar
- Laffont, J.-J., & Tirole, J. (1993). A theory of incentives in procurement and regulation. Cambridge: MIT Press.Google Scholar
- McCubbins, M., Noll, R., & Weingast, B. (1987). Administrative procedures as instruments of political control. Journal of Law, Economics and Organization, 3(2), 243–277.Google Scholar
- Olson, M. (1965). The logic of collective action: Public goods and the theory of groups. Cambridge: Harvard University Press.Google Scholar
- Sah, R. K., & Stiglitz, J. E. (1985). Human fallibility and economic organization. American Economic Review Papers and Proceedings, 75, 292–297.Google Scholar
- Wilson, J. (1989). Bureaucracy: What Government Agencies do and why they do it. Basic Books.Google Scholar