LAW 328 - Regulation of Markets

This course provides a survey of how the state intervenes to address major market failures with emphasis on regulation of competition, natural monopolies, externalities, and imperfect information. We will examine the reasons why markets fail and the theoretical rationale behind government intervention to correct those failures. We will study the tools the state uses to regulate markets including price and rate regulation, command and control regulation, market-based mechanisms, and incentive regulation. We will also analyze the economic consequences of various forms of regulation. The course will include case studies of a variety of regulated industries including electricity and utilities, telecommunications, and transportation. This course should be taken by students who want to work in a regulatory agency, on a house or senate committee that deals with regulated industries, in a law firm that deals with regulatory matters, or in a regulated industry. COURSE OBJECTIVE: At the end of the course students should understand and be able to explain to others the economic rationale for government regulation of markets. Students should also be able to evaluate the likely consequences of a regulation given appropriate information about the regulated industry and the policy in question. Students will be familiar with key types of economic regulations and the ways the regulations work (or fail to work) to increase efficiency. Students will also have an increased understating of key regulated industries. METHOD OF EVALUATION: Students will take midterm and final examinations, each accounting for 30% of the final grade. Students will also develop an industry case study which they will present orally and in writing (12 to 15 page paper) that will account for the remaining 40% of the final grade. This is a non-law course cross listed with law. The course materials will be found in Blackboard.