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Exceptions to the Rules: Variances from Regulatory Standards

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  • Anthony Marino

Abstract

In the major areas of regulation, standards can be violated through an appeal process set up as a part of the statutes. This paper formulates a model of the variance appeal process, characterizes the (perfect Bayesian) equilibria of this procedure and studies the welfare properties of these equilibria. I consider two versions of the decision rule used by the appeal board and suggest institutionally feasible alterations in these rules which can improve equilibrium welfare. I also study how obstructionist interest groups can affect the welfare performance of the decision rules. Copyright Springer Science+Business Media, Inc. 2006

Suggested Citation

  • Anthony Marino, 2006. "Exceptions to the Rules: Variances from Regulatory Standards," Journal of Regulatory Economics, Springer, vol. 29(2), pages 127-150, March.
    • Handle: RePEc:kap:regeco:v:29:y:2006:i:2:p:127-150
    DOI: 10.1007/s11149-006-6032-5
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    References listed on IDEAS

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    1. Milton Harris & Artur Raviv, 2005. "Allocation of Decision-making Authority," Review of Finance, Springer, vol. 9(3), pages 353-383, September.
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    More about this item

    Keywords

    Appeals; Variances; L5;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy

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