In the oil industry, it is in no one’s interest that there be any uncertainty or vagueness in the regulations about what should be considered a “bookable reserve” which a company can formally count as part of its net assets. Everyone wants the definitions to be extremely clear because then investors can make decisions with confidence and clarity, more money flows through the system, and assets can be traded and sold easily.
A world without such regulations is worse for everyone, except perhaps the extremely skilled con artist, and even those people have to live in a system with less net cash flowing through it due to the aforementioned uncertainty.
On the net, if a company can lobby for a regulation that increases their profits, they will do so regardless of whether that regulation also creates profits for their competitors.
If possible, of course, they will select regulations that preferentially favor their own company. I’m sure this is very widespread. But it isn’t the only use of regulation.
Well, yes, but your example is a sub-type of my “more profitable” claim. The companies want the definitions to be clear because otherwise there is a large uncertainty cost which will affect profits. They don’t care about destroying value as long as it’s not their value.
I agree that companies often lobby for regulations which decrease their risk—but typically what they want is to ossify the existing structures and put up barriers to newcomers and outside innovation. If you are large and powerful enough to influence regulations, you want to preserve your position as large and powerful. Generally speaking, that’s not a good thing.
Didn’t you mean to write
Companies want to construct a better game where they get more profitable and doing business is hard for the competitors.
..?
I think they want both.
In the oil industry, it is in no one’s interest that there be any uncertainty or vagueness in the regulations about what should be considered a “bookable reserve” which a company can formally count as part of its net assets. Everyone wants the definitions to be extremely clear because then investors can make decisions with confidence and clarity, more money flows through the system, and assets can be traded and sold easily.
A world without such regulations is worse for everyone, except perhaps the extremely skilled con artist, and even those people have to live in a system with less net cash flowing through it due to the aforementioned uncertainty.
On the net, if a company can lobby for a regulation that increases their profits, they will do so regardless of whether that regulation also creates profits for their competitors.
If possible, of course, they will select regulations that preferentially favor their own company. I’m sure this is very widespread. But it isn’t the only use of regulation.
Well, yes, but your example is a sub-type of my “more profitable” claim. The companies want the definitions to be clear because otherwise there is a large uncertainty cost which will affect profits. They don’t care about destroying value as long as it’s not their value.
I agree that companies often lobby for regulations which decrease their risk—but typically what they want is to ossify the existing structures and put up barriers to newcomers and outside innovation. If you are large and powerful enough to influence regulations, you want to preserve your position as large and powerful. Generally speaking, that’s not a good thing.