Competition in the Medical Profession: An Application of the Theory of Regulation: Reply

This comment represents an adjustment of a previous work which was itself an extension of Peltzman\u27s seminal, Toward a General Theory of Regulation. Peltzman\u27s work modeled the regulator as a third party whose objective function is the maximization of his political majority. Paul [5], following the approach suggested by Peltzman [7, 214], Hirschleifer [2, 241] and Becker [1, 245], extended Peltzman\u27s 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\u27s wealth function