Reputation and Entry

Jeffrey Butler, Enrica Carbone (), Pierluigi Conzo and Giancarlo Spagnolo

No 21, SITE Working Paper Series from Stockholm School of Economics, Stockholm Institute of Transition Economics

Abstract: This paper reports results from a laboratory experiment exploring the relationship between reputation and entry in procurement. There is widespread concern among regulators that favoring suppliers with good past performance, a standard practice in private procurement, may hinder entry by new (smaller or foreign) firms in public procurement markets. Our results suggest that while some reputational mechanisms indeed reduce the frequency of entry, so that the concern is warranted, appropriately designed reputation mechanisms actually stimulate entry. Since quality increases but not prices, our data also suggest that the introduction of reputation may generate large welfare gains for the buyer.

Keywords: Entry; Feedback mechanisms; Governance; Incomplete contracts; Limited enforcement; Incumbency; Multidimensional competition; Participation; Past performance; Procurement; Quality; Reputation; Vendor rating (search for similar items in EconPapers)
JEL-codes: H57 L14 L15 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2012-11-25
New Economics Papers: this item is included in nep-com and nep-cta
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://swopec.hhs.se/hasite/papers/hasite0021.pdf (application/pdf)

Related works:
Journal Article: Past performance and entry in procurement: An experimental investigation (2020)
Working Paper: Reputation and Entry in Procurement (2013)
Working Paper: Reputation and Entry (2013)
Working Paper: Reputation and Entry (2012)
Working Paper: Reputation and Entry (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:hasite:0021

Access Statistics for this paper

More papers in SITE Working Paper Series from Stockholm School of Economics, Stockholm Institute of Transition Economics Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Dominick Nilsson ().