Competition in the Medical Profession: An Application of the Theory of Regulation: Reply
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This comment represents an adjustment of a previous work which was itself an extension of Peltzman's seminal, "Toward a General Theory of Regulation." Peltzman's work modeled the regulator as a third party whose objective function is the maximization of his political majority. Paul , following the approach suggested by Peltzman [7, 214], Hirschleifer [2, 241] and Becker [1, 245], extended Peltzman's original analysis by modeling the regulator as a member of the producer group. This was accomplished by the inclusion of profits as a direct argument in the regulator's wealth function.