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Collective Reputation, Entry and Minimum Quality Standard

Raphael Soubeyran () and Elodie Rouviere ()

No 2008.7, Working Papers from Fondazione Eni Enrico Mattei

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: Collective Reputation; Entry; Minimum Quality Standard (search for similar items in EconPapers)
JEL-codes: L11 H41 I18 Q18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-com and nep-ent
Date: 2008-01
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