Regulation As Delegation

Bar-Gill, Oren; Sunstein, Cass R.

doi:10.2139/ssrn.2570669

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Regulation As Delegation

65 Pages Posted: 28 Feb 2015 Last revised: 6 Jun 2015

See all articles by Oren Bar-Gill

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Date Written: February 25, 2015

Abstract

In diverse areas – from retirement savings, to fuel economy, to prescription drugs, to consumer credit, to food and beverage consumption – government makes personal decisions for us or helps us make what it sees as better decisions. In other words, government serves as our agent. Understood in light of Principal-Agent Theory (PAT) and Behavioral Principal-Agent Theory (BPAT), a great deal of modern regulation can be helpfully evaluated as a hypothetical delegation. Shifting from personal decisions to public goods problems, we introduce the idea of reverse delegation, with the government as principal and the individuals as agents.

Keywords: regulation, principal-agent theory, behavioral economics, delegation

JEL Classification: D003, D10, D11, D18, D60, D80, K0, K2, D02, D14, D72, D73, D78, G28, H11, H41, I18

Suggested Citation: Suggested Citation

Bar-Gill, Oren and Sunstein, Cass R., Regulation As Delegation (February 25, 2015). Available at SSRN: https://ssrn.com/abstract=2570669 or http://dx.doi.org/10.2139/ssrn.2570669