Lefebvre, Perrin and Martimort, David (2023) Delegation, Capture and Endogenous Information Structures. TSE Working Paper, n. 23-1418, Toulouse

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A substantial literature has been devoted to analyzing how legislators delegate regulatory power to a more knowledgeable agency. Yet, much less attention has been paid to understand how this delegation process is shaped by the environment in which this agency operates, and more specifically by the actions of interest groups. We propose a model of regula-tory capture to assess how the distribution of information across interest groups and agencies impacts optimal delegation. Whether an interest group and his agency share information or not determines the scope for capture and how much discretion should be left to this agency in response. Whether asymmetric information reduces or increases discretion depends on the biases of the group and the agency vis-`a-vis Congress. Groups that are more aligned with Congress collect politically relevant information, while more extreme groups remain poorly informed. The information structure that endogenously emerges increases discretion under broad circumstances.

Item Type: Monograph (Working Paper)
Language: English
Date: March 2023
Place of Publication: Toulouse
Uncontrolled Keywords: Pluralistic Politics, Lobbying, Common Agency, Moral Hazard
JEL Classification: D82 - Asymmetric and Private Information
D86 - Economics of Contract - Theory
H10 - General
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse Capitole
Site: UT1
Date Deposited: 14 Mar 2023 12:58
Last Modified: 28 Aug 2023 07:36
OAI Identifier: oai:tse-fr.eu:127952
URI: https://publications.ut-capitole.fr/id/eprint/47020
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