The Financial Industry Regulatory Authority: Not Self-Regulation after All

Peirce, Hester

doi:10.2139/ssrn.2554519

Cited by 2 publications

(1 citation statement)

References 9 publications

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“…FINRA-registered firms), the regulatory activeness of U.S. Government/The Federal Reserve. At the early stages before 2008, SROs such as National Association of Securities Dealers, Inc. (NASD), New York Stock Exchange (NYSE) or even their combination FINRA can still regulate their members through execution of their en-forcement programs such as great sanctions (i. e. financial penalties) [54,69]. Correspondingly, it can be observed in Fig.…”

Section: Introductionmentioning

confidence: 99%

Cooperator-driven and defector-driven punishments: How do they influence cooperation?

Cui

Zhou

et al. 2019

Phys. Rev. E

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Economic studies have shown that there are two types of regulation schemes which can be considered as a vital part of today's global economy: self-regulation enforced by self-regulation organizations to govern industry practices, and government regulation which is considered as another scheme to sustain corporate adherence. An outstanding problem of particular interest is to understand quantitatively the role of these regulation schemes in evolutionary dynamics. Typically, punishment usually occurs for enforcement of regulations. Taking into account both types of punishments to curve the regulations, we develop a game model where six evolutionary situations with corresponding combinations of strategies are considered. Furthermore, a semi-analytical method is developed to allow us to give an accurate estimations of the boundaries between the phases of full defection and nondefection. We find that, associated with the evolutionary dynamics, for infinite well-mixed population, the mix of both punishments performs better than one punishment alone in promoting public cooperation, but for networked population the cooperator-driven punishment turns out to be a better choice. We also uncover monotonous facilitating effects of synergy effect, punishment fine and feedback sensitivity on the public cooperation for infinite well-mixed population. Conversely, for networked population an optimal intermediate range of feedback sensitivity is needed to best promote punishers' populations. Overall, networked structure is overall more favorable for punishers and further for public cooperation, because of both network reciprocity and mutualism between punishers and cooperators who do not punish defectors. We provide physical understandings of the observed phenomena, through a detailed statistical analysis of frequencies of different strategies and spatial pattern formations in different evolution situations. These results provide valuable insights into how to select and enforce suitable regulation measures to let public cooperation keep prevalent, which has potential implications not only to self-regulation, but also to other topics in economics and social science.

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Section: Introductionmentioning

confidence: 99%