Humboldt-Universität zu Berlin >> Wirtschaftswissenschaftliche Fakultät


Subproject A8

The Dynamics of Regulatory Risk
Head of Project : Prof. Dr. Roland Strausz

+49 (0)30 2093 5676


+49 (0)30 2093 5938



Humboldt Universität zu Berlin
School of Business and Economics
Unter den Linden 6
10099 Berlin



NameTitle Email
Vasama, SuviM.Sc., Dipl.- Volksw.



This project intends to arrive at a better understanding of regulatory risk, the risk associated with new or changing regulation over time. Recent surveys under senior risk managers identify regulatory risk as one of the greatest current threats to business (e.g., Economist 2005, DLA Piper 2007). Despite its importance to practitioners, regulatory risk has not received much attention in economic theory and our understanding of the associated problems is limited. Regulatory risk may reduce the incentives of regulated firms to invest and innovate, thereby threatening economic growth. Given its importance in practice, a proper understanding of the economic effects of regulatory risk in the context of existing models of regulation is needed.
In this project we propose a comprehensive study of regulatory risk. The emphasis lies on, but is not limited to, the economic effects of regulatory risk on a firm’s incentives to invest and innovate. In addition to the effects of regulatory risk, the project proposes to study its causes and ways to manage regulatory risk. Regulatory risk is to be examined from both the pragmatic and the optimal regulation approach to regulation. The effect of regulatory risk is to be studied in different regulatory environments such as the regulation of public utilities, network industries, consumer protection, and procurement

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