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Practice Makes Perfect: On Professional Standards

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  • 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.

Suggested Citation

  • Sällström, Susanna, 2007. "Practice Makes Perfect: On Professional Standards," CEPR Discussion Papers 6377, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6377
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    References listed on IDEAS

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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.
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    5. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
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    More about this item

    Keywords

    cultural economics; human capital; imperfect competition; learning; patent race; quality; skill; standards; technological change;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - 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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