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Discussion Paper Details

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Title: Keeping Both Eyes Wide Open: The Life of a Competition Authority Among Sectoral Regulators

Author(s): Pedro Pita Barros, Steffen Hoernig and Tore Nilssen

Publication Date: June 2008

Keyword(s): Competition authority, Regulatory bias and Sectoral regulators

Programme Area(s): Industrial Organization

Abstract: Competition authorities must pay attention to many industries simultaneously. Sectoral regulators concentrate on their own industry. Often both types of authority may intervene in specific industries and there is an overlap of jurisdictions. We show how a competition authority?s resource allocation is affected by its relationships with sectoral regulators and their biases. If agencies collaborate (compete), the competition authority spends more effort on the industry with the more (less) consumer-biased sectoral regulator. The competition authority spends budget increases on the industry whose regulator reacts less to more effort. The socially optimal budget corrects for distortions due to regulatory bias, but only downwards.

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Bibliographic Reference

Barros, P, Hoernig, S and Nilssen, T. 2008. 'Keeping Both Eyes Wide Open: The Life of a Competition Authority Among Sectoral Regulators'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6861