11 October 2005

Regulation by Information

This EU website brought to mind a paper I read some years ago by Giandomenico Majone on Regulation by Information. The basic idea is that one of the tools that a regulatory agency has is providing information to the public on items that the regulated firms might try to obscure. Here are some examples.

How does this theory apply to the EU website? What regulatory objectives might the EU have in mind? Is this superior or inferior to price regulation?

1 comment:

KuangChiu Huang said...

It could be the nice mechanism to conquer information asymmetry between carrier and end user. If a regulatory institution plays the role to reveal the information that carriers try to obscure, it means the information rent of private companies would be dissipated and consumer could gain the benefits from the disclosure. There might be no significant difference of total social welfare, but for an oligopoly market (e.g., mobile phone market); I support this policy that a public institution tries to balance commercial information through educating consumers.