Payment Law Advisor Legal Commentary and Resources for the Payment Industry

Behavioral Economics Theory of Regulation

Posted in Regulatory and Compliance

PLA today posts (under Regulatory and Compliance Resources — Articles/Publications) a recent academic paper offering a behavioral-economics analysis of regulatory conduct. The paper concludes, among other things, that “the incentive structure for regulators is likely to reward those who adopt politically expedient policies, either intentionally, due to a desire to please the political overseer, or accidentally, due to bounded rationality.” PLA believes its readers will find it refreshing to see behavioral economics applied not by regulators, but to them.