Nota di lavoro // Fondazione Eni Enrico Mattei: ETA, Economic theory and applications 2008,7
This article deals with the issue of entry into an industry where firms share a collective reputation. First, we show that free entry is not socially optimal; there is a need for regulation through the imposition of a minimum quality standard. Second, we argue that a minimum quality standard can induce firms to enter the market. Contrary to conventional wisdom, a minimum quality standard should not always be considered as a barrier to entry.
Collective Reputation Entry Minimum Quality Standard