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Managing competition in professional services and the burden of inertia

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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.

Suggested Citation

  • Benito Arruñada, 2005. "Managing competition in professional services and the burden of inertia," Economics Working Papers 827, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:827
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    References listed on IDEAS

    as
    1. Benito Arrunada, 2000. "Audit quality: attributes, private safeguards and the role of regulation," European Accounting Review, Taylor & Francis Journals, vol. 9(2), pages 205-224.
    2. Benito Arruñada, 2004. "Quality safeguards and regulation of online pharmacies," Health Economics, John Wiley & Sons, Ltd., vol. 13(4), pages 329-344, April.
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    More about this item

    Keywords

    professions; competition; lawyers; notaries; pharmacists;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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