On the (Ir)Relevance of Fee Structures in Certification

Martin Pollrich and Roland Strausz

No 391, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: Restrictions on certifiers’ fee structures are irrelevant for maximizing their profits and trade efficiency, and for the implementability of (monotone) distributions of rents. The irrelevance results exploit that certification schemes involve two substitutable dimensions—the fee structure and the disclosure rule—and adaptations in the disclosure dimension can mitigate restrictions on the fee dimension. While restrictions on fee structures do affect market transparency, it has no impact on economic efficiency or rent distributions.

Keywords: certification; fee structures; disclosure rules; transparency (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
Date: 2023-03-24
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