"I propose here the psychological attraction theory of financial regulation - that regulation is the result of psychological biases on the part of political participants - voters, politicians, bureaucrats, and media commentators; and of regulatory ideologies that exploit these biases. Some key elements of the psychological attraction approach are: salience and vividness, omission bias, scapegoating and xenophobia, fairness and reciprocity norms, overconfidence, and mood effects. This approach further emphasises emergent effects that arise from the interactions of individuals with psychological biases. For example, availability cascades and ideological replicators have powerful effects on regulatory outcomes." Copyright (c) 2008 The Author Journal compilation (c) 2008 Blackwell Publishing Ltd.
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Richard H. McAdams & Eric B. Rasmusen, 2004.
"Norms in Law and Economics,"
Working Papers
2004-11, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
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Degeorge, Francois & Patel, Jayendu & Zeckhauser, Richard, 1999.
"Earnings Management to Exceed Thresholds,"
Journal of Business,
University of Chicago Press, vol. 72(1), pages 1-33, January.
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Kevin M. Murphy & Andrei Shleifer, 2004.
"Persuasion in Politics,"
American Economic Review,
American Economic Association, vol. 94(2), pages 435-439, May.
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