Regulation As Delegation
Oren Bar-Gill,Cass R. Sunstein +1 more
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In this paper, the authors introduce the idea of reverse delegation, with the government as principal and the individuals as agents, in which a great deal of modern regulation can be helpfully evaluated as a hypothetical delegation.Abstract:
In diverse areas – from retirement savings, to fuel economy, to prescription drugs, to consumer credit, to food and beverage consumption – government makes personal decisions for us or helps us make what it sees as better decisions. In other words, government serves as our agent. Understood in light of Principal-Agent Theory (PAT) and Behavioral Principal-Agent Theory (BPAT), a great deal of modern regulation can be helpfully evaluated as a hypothetical delegation. Shifting from personal decisions to public goods problems, we introduce the idea of reverse delegation, with the government as principal and the individuals as agents.read more
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Behavioral Economics and Public Policy: A Pragmatic Perspective †
TL;DR: In this paper, the authors present a more pragmatic perspective on behavioral economics that focuses on its value for improving empirical predictions and policy decisions, and discuss three ways in which behavioral economics can contribute to public policy.
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Behavioral Economics and Public Policy 102: Beyond Nudging †
TL;DR: The United States ranks last among 16 wealthy peers in life expectancy, infant mortality, and obesity, and has taken very little action on climate change, despite the extremity of the threat it poses not only to future generations but even those alive today as discussed by the authors.
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Putting nudges in perspective
George Loewenstein,Nick Chater +1 more
TL;DR: The authors argue that behavioural economics can influence policy in a variety of ways, of which nudges are the most prominent but not necessarily the most powerful, and there is a wide range of hybrid policy actions with both economic and behavioural components (e.g., framing a tax or incentive in a specific way).
Posted Content
Information and the Scope of Liability for Breach of Contract: The Rule of Hadley V. Baxendale
TL;DR: In this paper, the effects of the alternative rules on two types of decisions: buyers' decisions about communicating their valuations of performance to sellers, and sellers' level of precautions to reduce the likelihood of nonperformance.
References
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Prospect theory: analysis of decision under risk
Daniel Kahneman,Amos Tversky +1 more
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Multitask Principal–Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design
Bengt Holmstrom,Paul Milgrom +1 more
TL;DR: In this article, a principal-agent model that can explain why employment is sometimes superior to independent contracting even when there are no productive advantages to specific physical or human capital and no financial market imperfections to limit the agent's borrowings is presented.
Posted Content
Prospect Theory: An Analysis of Decision Under Risk
Daniel Kahneman,Amos Tversky +1 more
TL;DR: Prospect Theory as mentioned in this paper is an alternative theory of individual decision making under risk, developed for simple prospects with monetary outcomes and stated probabilities, in which value is given to gains and losses (i.e., changes in wealth or welfare) rather than to final assets, and probabilities are replaced by decision weights.
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Formal and Real Authority in Organizations
Philippe Aghion,Jean Tirole +1 more
TL;DR: In this article, the authors developed a theory of the allocation of formal authority and real authority within organizations, and illustrated how a formally integrated structure can accommodate various degrees of "real" integration.
Book
The Theory of Incentives: The Principal-Agent Model
TL;DR: Laffont and Martimort as mentioned in this paper focus on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract, the essence of management and contract theory.