The John M. Olin Center

Paper Abstract

844. Oren Bar-Gill & Cass R. Sunstein, Regulation As Delegation, 01/2016.

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.

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