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Regulatory economics is the economics of regulation, in the sense of the application of law by government that is used for various purposes, such as centrally-planning an economy, remedying market failure, enriching well-connected firms, or benefiting politicians (see capture). It is not considered to include voluntary regulation that may be accomplished in the private sphere. For example, the sale and consumption of alcohol and prescription drugs are controlled by regulation in most countries, as are the food business, provision of personal or residential care, public transport, construction, film and TV, etc. Monopolies are often regulated, especially those which are difficult to abolish (natural monopoly). The financial sector is also highly regulated. Regulation can have several elements This differs from regulation in any voluntary sphere of activity, but can be compared with it in some respects. For example, when a broker purchases a seat on the New York Stock Exchange, there are explicit rules of conduct to which the broker must conform as contractual and agreed-upon conditions governing participation. The coercive regulations of the U.S. Securities and Exchange Commission, for example, are imposed without regard for any individual's consent or dissent as to that particular trade. However, in a democracy, there is still collective agreement on the constraint -- the body politic as a whole agrees, through its representatives, and imposes the agreement on the subset of entities participating in the regulated activity.
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Regulatory economics Subcategories
Regulatory economics Articles
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