Collective Reputation, Entry and Minimum Quality Standard
AbstractThis article deals with the issue of entry into an industry where firms share a collective reputation. First, we show that free entry is not socially optimal; there is a need for regulation through the imposition of a minimum quality standard. Second, we argue that a minimum quality standard can induce firms to enter the market. Contrary to conventional wisdom, a minimum quality standard should not always be considered as a barrier to entry.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2008.7.
Date of creation: Jan 2008
Date of revision:
Collective Reputation; Entry; Minimum Quality Standard;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-03-08 (Agricultural Economics)
- NEP-ALL-2008-03-08 (All new papers)
- NEP-COM-2008-03-08 (Industrial Competition)
- NEP-ENT-2008-03-08 (Entrepreneurship)
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- McQuade, Timothy & Salant, Stephen W. & Winfree, Jason, 2010.
"Markets with Untraceable Goods of Unknown Quality: A Market Failure Exacerbated by Globalization,"
dp-09-31, Resources For the Future.
- McQuade, Timothy & Salant, Stephen W. & Winfree, Jason, 2009. "Markets with untraceable goods of unknown quality: a market failure exacerbated by globalization," MPRA Paper 21874, University Library of Munich, Germany.
- Castriota Stefano & Delmastro Marco, 2010.
"Individual and Collective Reputation: Lessons from the Wine Market,"
Società editrice il Mulino, issue 1, pages 149-172.
- Castriota, Stefano & Delmastro, Marco, 2008. "Individual and Collective Reputation: Lessons from the Wine Market," Working Papers 45504, American Association of Wine Economists.
- Stefano Castriota & Marco Delmastro, 2011. "Inside the black box of collective reputation," Quaderni del Dipartimento di Economia, Finanza e Statistica 89/2011, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
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