S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Stockholm Institute of Transition Economics, Stockholm School of Economics SITE Working Paper Series

No 21:
Reputation and Entry

Jeffrey Butler (), Enrica Carbone (), Pierluigi Conzo () and Giancarlo Spagnolo ()

Abstract: This paper reports results from a laboratory experiment exploring the relationship between reputation and entry in procurement. There is widespread concern among regulators that favoring suppliers with good past performance, a standard practice in private procurement, may hinder entry by new (smaller or foreign) firms in public procurement markets. Our results suggest that while some reputational mechanisms indeed reduce the frequency of entry, so that the concern is warranted, appropriately designed reputation mechanisms actually stimulate entry. Since quality increases but not prices, our data also suggest that the introduction of reputation may generate large welfare gains for the buyer.

Keywords: Entry; Feedback mechanisms; Governance; Incomplete contracts; Limited enforcement; Incumbency; Multidimensional competition; Participation; Past performance; Procurement; Quality; Reputation; Vendor rating; (follow links to similar papers)

JEL-Codes: H57; L14; L15; (follow links to similar papers)

50 pages, November 25, 2012

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

hasite0021.pdf    PDF-file (1.05MB) 
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Evelina Bonnier ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:hasite:0021 This page was generated on 2015-03-25 00:18:28