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Market approval process, responsibility failure, and pressure groups

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  • Pierre FAUVET

Abstract

We consider the market approval process of a potential dangerous product for health and/or environment. In this context, the impact of a failure responsibility of the industrial pressure groups is studied. This failure may be due to the fact either that the industrial group responsibility is not recognized, or that the victims group does not request compensation for damages. Assuming that the pressure groups have private information about the damages, we analyse the incentives for a benevolent regulator to pay attention to the lobbying activities through a contest (Tullock, 1980). In particular, if there is no failure of th e responsibility system, we attest that the regulator could pay attention to the lobbies. However, failure responsibility of the industrial group never implements an optimal state of economy. Finally, we find that it is socially beneficial that the pressure groups play sequentially.

Suggested Citation

  • Pierre FAUVET, 2016. "Market approval process, responsibility failure, and pressure groups," Cahiers du GREThA (2007-2019) 2016-16, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    • Handle: RePEc:grt:wpegrt:2016-16
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    File URL: http://cahiersdugretha.u-bordeaux.fr/2016/2016-16.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    market approval process; contest; responsibility failure.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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