Principles of Microeconomics / Unit 10 MIC 0911 short lesson, about 20 seconds
Deregulation and Regulatory Capture
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The idea
From the nineteen seventies airlines, railroads, trucking and gas were deregulated. Regulation can also be captured: regulated firms shape the rules, supply the data and hire the regulators, so it serves incumbents.
In practice
No entrant joined major air routes for forty years before nineteen seventy-eight.
Where people slip
Deregulation brings entry, exit and layoffs along with lower prices; the regulation bullet has both edges.
Your place on the trail
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