Reputation and Entry

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

No 1215, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

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.

Pages: 50 pages
Date: 2012, Revised 2012-11
New Economics Papers: this item is included in nep-com and nep-ind
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Citations: View citations in EconPapers (1)

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http://www.eief.it/files/2012/11/wp-15-reputation-and-entry.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)
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Persistent link: https://EconPapers.repec.org/RePEc:eie:wpaper:1215

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