In this paper, I develop a formal model of the auditing market which is useful in predicting the economic consequences of the Securities Acts of 1933-34. The demand side of the market I study consists of a large number of firms, and the supply side consists of two auditors who compete in quality...

I investigate the consequences of imposing a minimum quality standard on an industry in which firms face quality-dependent fixes costs and compete in quality and price. Even though the high-quality sellers would satisfy the standard in the absence of regulation, imposing a standard leads these...