In free markets we tend to think of government regulation

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Reference no: EM13380806

In free markets, we tend to think of government regulation as bad: markets can regulate themselves and government regulation is ineffective and interferes with free market movements.

1) Does self-regulation work? Give examples of where it has worked well and where it has not. For this, think globally.

2) One argument is that self-regulated businesses with amenities attract more (and better) labor, forcing other businesses to improve in order to hire.

Case A: There are two businesses: S has excellent safety precautions while P does not. Both offer the same wage for the same job. Employees are attracted to S, so P must improve to get future employees. You can use the same argument for almost any benefit.

Case B: The same two firms, but now firm P pays a higher wage (perhaps even double).

Does S lower their standards and raise wages? How can S attract employees? The discussion should center on when self-regulation works, how to make it more effective and areas where self-regulation cannot be used (and why).

Reference no: EM13380806

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