Reputation on a credence good market: an economic analysis of professional self-regulation
Camille Chaserant () and
No 2011-32, EconomiX Working Papers from University of Paris Nanterre, EconomiX
This article provides a rationalization of (at least partial) professional self-regulation resting on the joint production of individual and collective reputations and its impact on the quality of professional services. It presents a short model that aims to show that (i) a high-quality steady-state exists in a market for a credence goods and that (ii) the likelihood of high quality increases when the market is self-regulated by the profession in comparison to the situation where there is no self-regulation. The law and economics literature usually criticizes self-regulation as a modern form of corporatism; we show that it may help to regulate quality when clients are faced with opportunistic professionals.
Keywords: professional services; credence goods; self-regulation; individual reputation; collective reputation (search for similar items in EconPapers)
JEL-codes: D8 K4 L14 L15 L43 L84 (search for similar items in EconPapers)
Pages: 8 pages
New Economics Papers: this item is included in nep-com, nep-law and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2011-32
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