Law Commons^™

Seeking Truth For Power: Informational Strategy And Regulatory Policy Making, Cary Coglianese, Richard Zeckhauser, Edward A. Parson

All Faculty Scholarship

Whether regulating mutual funds or chemical manufacturers, government's policy decisions depend on information possessed by industry. Yet it is not in any industry's interests to share information that will lead to costly regulations. So how do government regulators secure needed information from industry? Since information disclosed by any firm cannot be retrieved and can be used to regulate the entire sector, industry faces a collective action problem in maintaining silence. While collective silence is easy to maintain if all firms' interests are aligned, individual firms' payoffs for disclosure can vary due to heterogeneous effects of regulation and differing expectations about …