Private Politics and Public Regulation

Georgy Egorov and Bård Harstad

No 19737, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a dynamic game to explore the interaction between regulation and private policies, such as self-regulation by firms and activism. Without a public regulator, the possibility of self-regulation is bad for the firm, but good for activists who are willing to maintain a costly boycott to raise the likelihood of self-regulation. Results are reversed when the regulator is present: the firm then self-regulates to preempt public regulation, while activists start and continue boycotts to raise the likelihood of such regulation. Our analytical results describe when a boycott is likely, and when it may be expected to be short and/or successful. The model generates a rich set of testable comparative statics.

JEL-codes: D78 L31 L51 (search for similar items in EconPapers)
Date: 2013-12
New Economics Papers: this item is included in nep-reg
Note: POL
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Citations: View citations in EconPapers (7)

Published as Georgy Egorov & Bård Harstad, 2017. "Private Politics and Public Regulation," Review of Economic Studies, Oxford University Press, vol. 84(4), pages 1652-1682.

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Journal Article: Private Politics and Public Regulation (2017)
Working Paper: Private Politics and Public Regulation (2015)
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