| Abstract: | A consumer versus business view of regulation frequently is too simplistic. Producers as a group may also be able to obtain rents from non-consumer surplus sources, and therefore may have relatively strong aggregate incentives to organize and seek favorable regulation as compared to consumers' incentives to avoid such regulation. This occurs in an increasing cost industry where producers purchase inputs whose supply curves are not infinitely elastic. The rents obtained by producers through regulatorily initiated output restrictions then include transfers from resource suppliers as well as from consumers, and exceed the potential losses consumers face. |
