Collective Reputation, Entry and Minimum Quality Standard

Elodie Rouviere and Raphael Soubeyran

No 6325, Economic Theory and Applications Working Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: 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.

Keywords: Industrial; Organization (search for similar items in EconPapers)
Pages: 15
Date: 2008
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemet:6325

DOI: 10.22004/ag.econ.6325

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