Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71958
Authors: 
Meran, Georg
Schwarze, Reimund
Year of Publication: 
2007
Series/Report no.: 
Working Papers in Economics and Statistics 2007-07
Abstract: 
This papers studies the effects on service quality and consumer surplus of a minimum price which is fixed by a bureaucratic non-monopolistic professional association. It shows that the price set by a Niskanen-type professional assocation will maximize consumer surplus only if consumers demand the highest possible average quality. If consumers demand services of lesser quality, the association?s price will be too high if measured by consumer surplus. Moreover we show that a de-regulated market will always reproduce the favourable result of a uniformly high price in the case of top quality demand while delivering superior results in the case of a mixed demand for high and low quality services.
Subjects: 
liberal professions
price regulation
quality
professional association
self-regulation
EU competition policy
intrinsic motivation
JEL: 
L15
J44
K21
Document Type: 
Working Paper

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