Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103906
Authors: 
Pollrich, Martin
Wagner, Lilo
Year of Publication: 
2014
Series/Report no.: 
SFB/TR 15 Discussion Paper 481
Abstract: 
This paper studies the interaction of information disclosure and reputational concerns in certification markets. We argue that by revealing less precise information a certifier reduces the threat of capture. Opaque disclosure rules may reduce profits but also constrain feasible bribes. For large discount factors a certifier is unconstrained in the choice of a disclosure rule and full disclosure maximizes profits. For intermediate discount factors, only less precise, such as noisy, disclosure rules are implementable. Our results suggest that contrary to the common view, coarse disclosure may be socially desirable. A ban may provoke market failure especially in industries where certifier reputational rents are low.
Subjects: 
Certification
Bribery
Reputation
JEL: 
L15
D82
L14
L11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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