Market approval process, responsibility failure, and pressure groups

Pierre Fauvet

Cahiers du GREThA (2007-2019) from Groupe de Recherche en Economie Théorique et Appliquée (GREThA)

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.

Keywords: market approval process; contest; responsibility failure. (search for similar items in EconPapers)
JEL-codes: C72 D7 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cse and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:grt:wpegrt:2016-16

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