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Practice Makes Perfect: On Professional Standards

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Author Info
Sällström, Susanna
Abstract

Professional standards vary across professions and also change over time. One profession which has remained perfectionist is classical music, where the amount of practising is striking compared with other professions. Practising is a matter of increasing the reliability of ones skills rather than relying on a tool or a strike of genius to get it right. Once perfection has been achieved the individual will aim for higher quality since the effort is more likely to be worthwhile. Because the returns from perfection are higher the harder it is, the perfectionist equilibrium only arises in situations where genius is rare and reliability is low. As tools improve, even though perfection has become easier to achieve, professional standards may nonetheless decline. This mechanism is captured in an oligopoly model, where the failure rate and the quality are endogenously determined. It is shown that whilst individuals might be better off not playing a perfectionist equilibrium when reliability is low, welfare is higher in the perfectionist equilibrium than an enthusiastic equilibrium. Furthermore, when reliability is high individuals will play an enthusiastic equilibrium even though welfare and profits would be higher if they were perfectionists.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6377.

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Date of creation: Jul 2007
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Handle: RePEc:cpr:ceprdp:6377

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Related research
Keywords: cultural economics; human capital; imperfect competition; learning; patent race; quality; skill; standards; technological change;

Find related papers by JEL classification:
D2 - Microeconomics - - Production and Organizations
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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  1. Richard E. Caves, 2003. "Contracts between Art and Commerce," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 73-83, Spring. [Downloadable!] (restricted)
  2. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August. [Downloadable!] (restricted)
  3. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June. [Downloadable!] (restricted)
  4. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908 Elsevier. [Downloadable!] (restricted)
  5. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  6. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December. [Downloadable!] (restricted)
  7. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-67, May. [Downloadable!] (restricted)
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