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Self-Regulatory Organizations Under the Shadow Of Governmental Oversight: An Experimental Investigation

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  • Silvester Van Koten
  • Andreas Ortmann

Abstract

Self-regulatory organizations (SROs) can be found in education, healthcare, and other not-for-profit sectors as well as in the accounting, financial, and legal professions. DeMarzo et al. (2005) show theoretically that SROs can create monopoly market power for their affiliated agents, but that governmental oversight, even if less efficient than oversight by the SRO, can largely offset the market power. We provide an experimental test of this conjecture. For carefully rationalized parameterizations and implementation details, we find that the predictions of DeMarzo et al. (2005) are borne out.

Suggested Citation

  • Silvester Van Koten & Andreas Ortmann, 2014. "Self-Regulatory Organizations Under the Shadow Of Governmental Oversight: An Experimental Investigation," CERGE-EI Working Papers wp519, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp519
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    References listed on IDEAS

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    1. Avner Shared & John Sutton, 1981. "The Self-Regulating Profession," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(2), pages 217-234.
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    Cited by:

    1. Silvester Koten, 2021. "Self-regulation and governmental oversight: a theoretical and experimental study," Journal of Regulatory Economics, Springer, vol. 59(2), pages 161-174, April.

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    More about this item

    Keywords

    experimental economics; self-regulatory organizations; governmental oversight;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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