Reputation on a credence good market: an economic analysis of professional self-regulation
This article provides a rationalization of (at least partial) professional self-regulation resting on the joint production of individual and collective reputations and its impact on the quality of professional services. It presents a short model that aims to show that (i) a high-quality steady-state exists in a market for a credence goods and that (ii) the likelihood of high quality increases when the market is self-regulated by the profession in comparison to the situation where there is no self-regulation. The law and economics literature usually criticizes self-regulation as a modern form of corporatism; we show that it may help to regulate quality when clients are faced with opportunistic professionals.
|Date of creation:||2011|
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- Nunez, Javier, 2001. "A model of self-regulation," Economics Letters, Elsevier, vol. 74(1), pages 91-97, December.
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"Quacks, Lemons, and Self Regulation: A Welfare Analysis,"
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Springer, vol. 7(3), pages 309-25, May.
- Thomas Gehrig & Peter-J. Jost, 1993. "Quacks, Lemons, and Self-Regulation: A Welfare Analysis," Discussion Papers 1057, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Van Den Bergh, Roger & Faure, Michael, 1991. "Self-regulation of the professions in Belgium," International Review of Law and Economics, Elsevier, vol. 11(2), pages 165-182, September.
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