Bayesian Regulatory Mechanisms: Corruption and Learning

Semih Koray and Ismail Saglam
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Semih Koray: Bilkent University

Chapter 2 in Contemporary Economic Issues, 1999, pp 30-48 from Palgrave Macmillan

Abstract: Abstract Regulation can be described as central interference with industrial activities, aiming to achieve social efficiency when it cannot be reached through the market by itself. This area of economics basically deals with the design of artificial rules under which outcomes which otherwise can only be attained through cooperation can be reached through the non-cooperative and decentralized behaviour of agents. Although the theory of regulation can be traced back to Hotelling (1938) and Dupuit (1952), it is only in the past two decades that it gained a crucial impetus through its formulation within the game-theoretic framework of mechanism design. It is even more recently that the principal—agent setting has been employed in this area to treat the asymmetry of information between the regulating and the regulated agents.

Keywords: Prior Belief; Regulatory Design; Preference Profile; Social Choice Rule; Mechanism Design Problem (search for similar items in EconPapers)
Date: 1999
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DOI: 10.1007/978-1-349-14540-9_2

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