Hierarchical Game-Theoretic Models of Transparency in the Administrative State

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Hierarchical Game-Theoretic Models of Transparency in the Administrative State

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Title: Hierarchical Game-Theoretic Models of Transparency in the Administrative State
Author: Tai, Laurence
Citation: Tai, Laurence. 2013. Hierarchical Game-Theoretic Models of Transparency in the Administrative State. Doctoral dissertation, Harvard University.
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Abstract: This dissertation develops three game-theoretic models in each of its three chapters to explore the strategic implications of transparency in the administrative state. Each model contains a similar set of three players: a political principal, an agent representing an agency or a bureaucrat, and an interested third party. The models consider the utility of transparency as a tool for mitigating regulatory capture, in which the third party influences the agent to serve its interest rather than the principal's. Chapter 1, "Transparency and Media Scrutiny in the Regulatory Process," models transparency as the volume of records that the media receives from the agent, which raises the likelihood of news alleging low costs to the interest group after the agent's proposal of lax regulation. Such reports cost these two players and may deter the group from capturing the agent. Among other things, the model describes costs due to distorted policy proposals and loss of information when greater transparency causes inaccurate reports to increase along with accurate ones. In Chapter 2, "Transparency and Power in Rulemaking," transparency is a requirement for the agent to disclose an item of information, such as his message from the regulated party or his signal about the cost of regulation. The agent can always disclose this information, but doing so may increase the principal's power to set regulation higher than he or the regulated party desires. A key result is that transparency is not necessary for the principal to know as much as the agent does but may discourage the generation of the message or signal. Chapter 3, "A Reverse Rationale for Reliance on Regulators," suggests that an agent can benefit a principal not by gathering information from an outsider that she cannot access, but by preventing her from obtaining or acting on this information. The agent benefits the principal when he induces additional effort in the outside party's information generation because he is more adversarial toward that party than she is. Mandatory disclosure of the agent's information is harmful because it effectively allows the outsider to communicate directly with the principal and provide lower quality information.
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Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:11124840
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