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Much economic activity in the United States today emanates from technological advances that optimize through contextualization. Innovations as varied as Airbnb and Uber, fintech firms, and precision medicine are transforming major sectors in the economy by customizing goods and services as well as refining matches between available resources and interested buyers. The technological advances that make up the optimizing economy create new challenges for government oversight of the economy. Traditionally, government has overseen economic activity through general regulations that aim to treat all individuals equally; however, in the optimizing economy, business is moving in the direction of greater individualization, not generalization. An ever more optimizing economy therefore demands an increasingly smart, optimizing system of regulatory oversight. To ensure that government can properly balance policy goals in the new economy, steps need to be taken now to enhance the technological and analytical sophistication of the regulatory workforce, improve government’s information technology infrastructure, build stronger and more complete collections of data, and draw on policy lessons from other periods of technological innovations. In the optimizing economy, government regulators will continue to play a crucial role in protecting the public from market failures, but, to fulfill that role, government will need to follow the private sector’s lead and build up its own capacity for optimization.


Law and economics, government regulation, information technology, data analysis, risk management

Publication Title

University of Pennsylvania Journal of Law & Public Affairs

Publication Citation

4 U. Pa. J. L. & Pub. Affairs 1 (2018)