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Émeric HENRY (Sciences Po) – “Approval Regulation, Liability and Withdrawal: Balancing Ex Ante Experimentation and Ex Post Learning” joint with Marco Loseto and Marc Ottaviani

May 2, 12:15 pm - 1:30 pm

The Microeconomics Seminar: Every Wednesday at 12:15 pm.

Time: 12:15 pm – 1:30 pm
Date: 2nd of May 2018
Place: Room 3001.

Émeric HENRY (Sciences Po) – “Approval Regulation, Liability and Withdrawal: Balancing Ex Ante Experimentation and Ex Post Learning” joint with Marco Loseto and Marco Ottaviani

Abstract: Dynamic adoption policies of activities with uncertain returns are characterized by three key decisions: in the ex ante experimentation phase, the decisions when to abandon experimentation and when to introduce to market; in the ex post learning phase, the decision when to withdraw following the accumulation of bad news. In a tractable continuous-time model, we study the optimal mix of the three instruments regulators employ to align the private incentives of firms: ex ante approval regulation, ex post withdrawal regulation, and liability. Our results can rationalize the large array of regulatory environments observed across applications ranging from product safety to patent protection.

Organizers: Marie-Laure Allain, Pierre Boyer, Laurent Linnemer  &  Morgane Cure (CREST)

Sponsors:
CREST

Food is provided.

Link to the paper.

Details

Date:
May 2
Time:
12:15 pm - 1:30 pm
Event Categories:
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