Managing competition in professional services and the burden of inertia

Benito Arruñada

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Professional services require certain organizational patterns in order to avoid information asymmetries and external effects. These same patterns are used within production structures involving various degrees of monopoly. However, competitive restraints are justified today only when substantial external effects are clearly present, whereas information asymmetries hardly justify such restraints because reputational investments have become widespread in the economy and are relatively efficient in overcoming such asymmetries. As a consequence, innovation in the production of externalities can make competitive constraints unnecessary.

Keywords: professions; competition; lawyers; notaries; pharmacists (search for similar items in EconPapers)
JEL-codes: J44 K21 K23 L44 (search for similar items in EconPapers)
Date: 2005-05
New Economics Papers: this item is included in nep-com and nep-law
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