Abstract
IN recent years there has been a growing suspicion that the process of regulation in many industries has not resulted in superior market performance. Instead, it has been argued that regulation either has had no effect on the markets in which it operates, or that it has caused society to incur substantial social costs.2 Perhaps more disturbing to some policy planners, a body of literature has arisen that treats regulation little more than a means for producers to improve their own well-being at the expense of consumers and society a whole. This view is inherent in a number of studies of regulation,3 but has been recently elevated to a general theory by Stigler.4 The Stiglerian hypothesis holds, simply, that as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit.s To the extent that it is valid, this theory has widespread significance for antitrust policy. If regulation is viewed in its traditional role a governmental corrective device that improves market performance in instances in which competition fails, perhaps in the case of natural monopoly, then antitrust and regulation policies are complementary: both work toward aligning
Published Version
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