Allocating lawmaking powers: Self-regulation vs government regulation

Does Consumer Believe on Advertisers? The Evaluation of Advertising Skepticism in India and China

“…LaBarbera (1982) and Calfee & Ringold (1994) observed that skepticism about advertising could be reduced through strong advertising regulations. To facilitate the economy of developing countries governments introduced a two fold path regulation in order to justify serving both the advertisers' interest: centralized and self regulated system, having substantial knowledge at hand, the operators of self regulatory system and the advertisers enjoy a vital edge and upper hand in dealing with their consumers, in addition empowering the self regulatory rights have concerns for regulatory agreements which are usually not sufficient to ensure consumer rights (Grajzl & Murrell, 2007). Hence, the power shifts to only advertisers by overlooking the element of potential social welfare.…”

Self-regulation

“…When is the trade-off resolved in favour of self-regulation and when would it be preferable to leave regulation in the hands of a central authority? Self-regulation yields higher social welfare than government regulation when uncertainty is strong, when the divergence of interests between producers and consumers is small, and when the government attaches a high weight to consumer surplus in the social welfare function (Grajzl and Murrell, 2007). In all these cases, in fact, the trade-off between the pro-industry bias and the increased quality of regulation is dominated by the gains due to more efficient regulation.…”

<i>Quis Custodiet Ipsos Custodies</i> on the Internet? Self-Regulation as a Threat and a Promise

“…34 For instance, if content controls or quality of service standards exceed societal willingness to pay or foreclose customer access to a range of services, the result could be static inefficiency or choking off of signals for change. 35 Coase (1960), Grajzl and Murrell (2007), Krarup (1999), National Consumer Council (2003), Newman and Bach (2004).…”

“…Increasing the range and quality of information available can influence consumers' buying behaviour, leading to voluntary action without classic regulation 39 .…”

“…X [69] Wide consumer participation X X X X [44] Use form of existing XRO as indicator of future objectives, performance, impacts X X X X [52] Need for transnational agreement: are the XROs already transnational in scope? X X X X [76] Bargaining within XRO, with government X X [51], [39], [69], [70] Placement of liability for outcomes within XRO X X [32] Are there strong informational asymmetries between XRO members and regulators? X X [37], [7], [17] Relationship between XRO and concerned authorities (partnership, adversarial, etc.)…”