Reference no: EM131782903

1. The North Carolina Board of Dental Examiners was established under North Carolina law and charged with administering a licensing system for dentists. A majority of the members of the board are themselves practicing dentists. North Carolina statutes delegate authority to the dental board to regulate the practice of dentistry, but did not expressly provide that teeth whitening was within the scope of the practice of dentistry. Following complaints by dentists that non-dentists were performing teeth-whitening services for low prices, the dental board conducted an investigation. The board subsequently issued cease and desist letters to dozens of teeth-whitening outfits, as well as to some owners of shopping malls where teeth-whiteners operated. The effect on the teeth-whitening market in North Carolina was dramatic." Many would argue that it is obvious that dentists should serve on the board of the system that licenses dentists, since they have the expertise to certify quality. Given the information in this chapter, aside from ensuring quality, why else might dentists find it in their interest to control the licensing system? Why do you think there were complaints and an investigation that teeth were being whitened "for low prices?"

2.  Political scientists usually conclude that voters dislike negative campaign ads, but we can use game theory to offer an explanation for why they continue to be used. While negative ads are (nauseatingly) commonplace in electoral competition, they are far less frequent in business competition; i.e., it is rare to see company A directly attacking the quality or character of competing company B to the extent that political candidate X attacks political candidate Y. (We might see a company talk about the insufficiencies of "the leading brand," but the negativity is very tame compared to what happens during campaign season.) How might game theory also offer an explanation for this behavior?