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Entry restrictions and the determination of quality

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  • Walter Garcia-Fontes

    ()
    (Universitat Pompeu Fabra, Department of Economics, Ramon Trias Fargas 25-27, 08005 Barcelona, Spain University of Rochester Universidad Torcuato Di Tella, Mi nones 2177, C1428 ATG Buenos Aires, Argentina)

  • Hugo Hopenhayn

    ()
    (Universitat Pompeu Fabra, Department of Economics, Ramon Trias Fargas 25-27, 08005 Barcelona, Spain University of Rochester Universidad Torcuato Di Tella, Mi nones 2177, C1428 ATG Buenos Aires, Argentina)

Abstract

Entry restrictions are a common form of regulation in markets and occupations, either as a means of limiting the size of a market or affecting the quality of products or services provided by it. This paper analyzes demand, cost and informational characteristics that affect the impact of this type of policies on the quality mix of products provided by an industry and the welfare of its consumers. Selective increases in the costs of entry such as licensing requirements and direct restrictions with competitive bidding for entry rights are considered. We analyze the effects of these policies on entry decisions and also the additional selection effects that are obtained when exit is allowed for and the rights to participate in an industry can be freely traded.

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Bibliographic Info

Article provided by Springer in its journal Spanish Economic Review.

Volume (Year): 2 (2000)
Issue (Month): 2 ()
Pages: 105-127

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Handle: RePEc:spr:specre:v:2:y:2000:i:2:p:105-127

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Keywords: Quality; licenses; entry;

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Cited by:
  1. Antoni Bosch-Domènech & Joaquim Silvestre, 1996. "Credit constraints in general equilibrium: Experimental results," Economics Working Papers 105, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Vladimir Marianov & Daniel Serra, 1994. "Probabilistic maximal covering location models for congested systems," Economics Working Papers 70, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Walter Garcia Fontes & Massimo Motta, 1994. "Quality of professional services under price floors," Economics Working Papers 87, Department of Economics and Business, Universitat Pompeu Fabra.
  4. Guillermo Ordonez & Andrew Atkeson, 2009. "Optimal Regulation in the Presence of Reputation Concerns," 2009 Meeting Papers 830, Society for Economic Dynamics.
  5. Morris M. Kleiner & Richard M. Todd, 2009. "Mortgage Broker Regulations That Matter: Analyzing Earnings, Employment, and Outcomes for Consumers," NBER Chapters, in: Studies of Labor Market Intermediation, pages 183-231 National Bureau of Economic Research, Inc.
  6. Morris M. Kleiner & Richard M. Todd, 2007. "Mortgage Broker Regulations That Matter: Analyzing Earnings, Employment, and Outcomes for Consumers," NBER Working Papers 13684, National Bureau of Economic Research, Inc.

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