On Reputational Rents as an Incentive Mechanism in Competitive Markets

This paper shows that more intense competition may improve, rather than hamper, the chances that a market for an experience good or service overcomes the problems caused by informational asymmetries. This, in spite of the fact that intensified competition diminishes the reputational rents that -allegedly- provide the incentives for the production of high quality. Our results show that instead, these incentives are created by price differentials not levels.

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Year of publication:	2009
Authors:	Vial, Bernardita ; Felipe Zurita.
Institutions:	Instituto de Economía, Facultad de Ciencia Económicas y Administrativas
Subject:	Reputation \| rents \| competition \| adverse selection \| experience good \| public monitoring

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Extent:	application/pdf
Series:	Documentos de Trabajo. - ISSN 0717-7593.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 354
Classification:	L15 - Information and Product Quality; Standardization and Compatibility ; D82 - Asymmetric and Private Information ; D41 - Perfect Competition
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005002718