DSpace - Tor Vergata >
FacoltĂ  di Economia >
CEIS - Centre for International Studies on Economic Growth >
Quaderni >

Please use this identifier to cite or link to this item: http://hdl.handle.net/2108/276

Title: Are you a doctor or a Quack? Provision of quality and self-regulation in a market for professional services
Authors: Sestini, Roberta
Issue Date: Apr-2002
Publisher: CEIS
Series/Report no.: Quaderni CEIS; 167
Abstract: This paper aims at analysing the behaviour of sellers in a market for an experience good where it is not feasible to credibly signal quality through prices. Due to a different level of the initial investment in human capital, firms are distinguished into low-type and high-type ones. Along the lines of Bagwell and Riordan, (1986), and Gehrig and Jost, (1995), it is assumed that consumers may migrate after the first time period. The novelty of this paper is that the probability of migration is endogenized being dependent on producers’ types. We find that with asymmetric information, both low-type and high-type firms choose an optimal quality strictly lower than under full information. Under quite general conditions equilibrium profits and consumers’ welfare are reduced too. It is therefore reasonable that producers face an incentive to improve upon this equilibrium. A Self-Regulating Organisation (SRO) is introduced with the aim of setting a common minimum quality standard. A SRO rep...
URI: http://hdl.handle.net/2108/276
Appears in Collections:Quaderni

Files in This Item:

File Description SizeFormat
167.pdf111KbAdobe PDFView/Open

Show full item record

All items in DSpace are protected by copyright, with all rights reserved.