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Collective Reputation, Entry and Minimum Quality Standard

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Author Info

  • Raphaël Soubeyran

    (INRA-MOISA)

  • Elodie Rouvière

    (INRA-MOISA)

Abstract

This 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 Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2008.7.

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Date of creation: Jan 2008
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Handle: RePEc:fem:femwpa:2008.7

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Keywords: Collective Reputation; Entry; Minimum Quality Standard;

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Cited by:
  1. McQuade, Timothy & Salant, Stephen W. & Winfree, Jason, 2010. "Markets with Untraceable Goods of Unknown Quality: A Market Failure Exacerbated by Globalization," Discussion Papers dp-09-31, Resources For the Future.
  2. Castriota Stefano & Delmastro Marco, 2010. "Individual and Collective Reputation: Lessons from the Wine Market," L'industria, Società editrice il Mulino, issue 1, pages 149-172.
  3. 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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