Robust Technology Regulation
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arXiv
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| Main Authors: | , |
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| Format: | Preprint |
| Published: |
2024
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| _version_ | 1866915604679622656 |
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| author | Koh, Andrew Sanguanmoo, Sivakorn |
| author_facet | Koh, Andrew Sanguanmoo, Sivakorn |
| contents | We analyze how uncertain technologies should be robustly regulated and how regulation should evolve with new information. An adaptive sandbox comprising a zero marginal tax up to an evolving quantity limit is (i) robust: it delivers optimal payoff guarantees when the agent's learning process and/or preferences are chosen adversarially; (ii) dominant: it outperforms other robust and regular mechanisms across all agent learning processes and preferences; (iii) time-consistent: it is the only robust mechanism that can be implemented without commitment. Robustness is important: absent robust regulation, worst-case payoffs can be arbitrarily poor and are induced by weak but growing optimism that encourages excessive risk-taking. Our results offer optimality foundations for existing policy and speak directly to current debates around managing emerging technologies. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2408_17398 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | Robust Technology Regulation Koh, Andrew Sanguanmoo, Sivakorn Theoretical Economics We analyze how uncertain technologies should be robustly regulated and how regulation should evolve with new information. An adaptive sandbox comprising a zero marginal tax up to an evolving quantity limit is (i) robust: it delivers optimal payoff guarantees when the agent's learning process and/or preferences are chosen adversarially; (ii) dominant: it outperforms other robust and regular mechanisms across all agent learning processes and preferences; (iii) time-consistent: it is the only robust mechanism that can be implemented without commitment. Robustness is important: absent robust regulation, worst-case payoffs can be arbitrarily poor and are induced by weak but growing optimism that encourages excessive risk-taking. Our results offer optimality foundations for existing policy and speak directly to current debates around managing emerging technologies. |
| title | Robust Technology Regulation |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2408.17398 |