Collective Reputation, Entry and Minimum Quality Standard

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.


Issue Date:
2008
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/6325
Total Pages:
15
JEL Codes:
L11; H41; I18; Q18
Series Statement:
ETA Nota di Lavoro
7.2008




 Record created 2017-04-01, last modified 2018-01-22

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