Paper #827

Title:

Managing competition in professional services and the burden of inertia

Author:

Benito Arruñada

Date:

May 2005

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.

Keywords:

professions, competition, lawyers, notaries, pharmacists

JEL codes:

K21, K23, J44, L44

Area of Research:

Management and Organization Studies

Published in:

Claus-Dieter Ehlermann e Isabela Atanasiu, eds., European Competition Law Annual 2004: The Relationship between Competition Law and the (Liberal) Professions, Hart Publishing, Oxford and Portland Oregon, 2006, pp. 51-71

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