Regulators as reflexive governance platforms
License
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
1783-5917
Issue Date
Type of Publication
Keyword(s)
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
Competition and Regulation in Network Industries, 2011, Vol. 12, No. 3, pp. 194-209
[Florence School of Regulation]; [Energy]
Cite
BROUSSEAU, Eric, GLACHANT, Jean-Michel, Regulators as reflexive governance platforms, Competition and Regulation in Network Industries, 2011, Vol. 12, No. 3, pp. 194-209, [Florence School of Regulation], [Energy] - https://hdl.handle.net/1814/19460
Abstract
Network industries are now characterized by a regime of permanent innovation, while they continue to be fixed and sunk cost industries, due to the high level of investments in R&D and infrastructures. Players in these industries need to coordinate their investments; hence a threat of collusion. In the same time competition is fierce due to the opportunities brought by innovations; hence the permanent risk of catastrophic evolutions due to systemic interdependencies. To balance this dilemma between coordination and competition, independent third parties granted with capabilities to influence the “rules of the game” are needed. They need however to access critical information and knowledge. Coordination of investments requires figuring out the possible futures of the technology and of the industry. Avoiding oligopoly capture relies on an understanding of costs and business models. Since the relevant information and knowledge are dispersed and permanently evolving, regulators have to organize fora in which the stakeholders have incentives to reveal information, both because they need to learn from others, and because they seek to influence the industry regulation. Properly organized fora establish an open information competition among stakeholders, which can be penalized if they hide or distort information too much.