The Demand for and Supply of Assurance
MARKET FAILURE OR SUCCESS: THE NEW DEBATE, T. Cowen and E. Crampton, eds., Cheltenham, UK: Edward Elgar
22 Pages Posted: 12 Nov 2003
Consumers want products and services that are safe and of good quality. Corresponding to such demand is the demand for assurance, before the fact, that the quality and safety will be as promised. This demand for assurance creates opportunities for entrepreneurs to profit by providing assurance - and they do so in a wide and largely unappreciated variety of ways. When it comes to assurance, the essential dialectic of the free enterprise system applies pretty well. I think governments' quality and safety restrictions on the freedom of contract, known to be so harmful, are unredeemed and should be repealed.
Keywords: Assurance, seal of approval, reputation, knower, trust
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