Entry and fixed costs in charitable sectors
No 7978, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Fixed costs that are not sunk do not translate into entry barriers against for-profit competitors. We show that in the case of non-commercial, not- for-profit providers, the presence of fixed costs may protect the position of an inefficient incumbent. In these situations, successfully contesting the position of incumbents may require new providers to adopt a for- profit organizational form – notwithstanding the moral hazard problem that this might entail when quality of provision is difficult to monitor – or, alternatively, to secure core funding from government or from a large private donor.
Keywords: Charities; core funding; not-for-profit organizations (search for similar items in EconPapers)
JEL-codes: L1 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at firstname.lastname@example.org
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:7978
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=7978
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().