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On the (Ir)Relevance of Fee Structures in Certification

Author

Listed:
  • Martin Pollrich

    (Bonn University)

  • Roland Strausz

    (HU Berlin)

Abstract

Restrictions on certifiers’ fee structures are irrelevant for maximizing their profits and trade efficiency, and for the implementability of (monotone) distributions of rents. The irrelevance results exploit that certification schemes involve two substitutable dimensions—the fee structure and the disclosure rule—and adaptations in the disclosure dimension can mitigate restrictions on the fee dimension. While restrictions on fee structures do affect market transparency, it has no impact on economic efficiency or rent distributions.

Suggested Citation

  • Martin Pollrich & Roland Strausz, 2023. "On the (Ir)Relevance of Fee Structures in Certification," Rationality and Competition Discussion Paper Series 391, CRC TRR 190 Rationality and Competition.
    • Handle: RePEc:rco:dpaper:391
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    More about this item

    Keywords

    certification; fee structures; disclosure rules; transparency;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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