# kaal:claim:kaal-2014-dynamicregulationviagove-005

**Claim.** Because transaction costs, imperfect information, and bounded rationality shape the rulemaking process, even solutions that are optimal at enactment become unstable and suboptimal over time.

**Type.** failure  **Support.** argued

**Holds when.**

- rules are enacted as stable and presumptively optimal

**Source quote.**

> NIE recognizes that transaction costs, imperfect infor- mation, and bounded rationality impact the rulemaking process, rendering even optimal solutions to regulatory problems unstable and suboptimal over time

**From.** Kaal, *Dynamic Regulation via Governmental Contracts* (2014), II.1 Learning Process to Improve Regulatory Information, page 9

**Cite as.** Kaal, Dynamic Regulation via Governmental Contracts (2014)

**Verify.** sha256 of source PDF `7320aec036ccf2f6739f0854ea8749903e8902e77c2ec39543b64b358459c408` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202014%20-%20Dynamic%20Regulation%20via%20Governmental%20Contracts.pdf

**Failure mode.** decay of presumptively optimal rules  (family: rule-obsolescence-and-ossification)

**Topics.** economics, institutional-design, risk-and-incentives

**Keywords.** new-institutional-economics, rule-obsolescence, bounded-rationality, transaction-costs

**Related claims.**

- restates: https://wulfkaal.github.io/claims/2267560-019
- extends: https://wulfkaal.github.io/claims/2267560-005
- specializes: https://wulfkaal.github.io/claims/2267560-033

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.