Managing Competition in Professional Services and the Burden of Inertia

Arruñada, Benito

doi:10.2139/ssrn.859245

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Managing Competition in Professional Services and the Burden of Inertia

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

21 Pages Posted: 28 Nov 2005 Last revised: 22 Jul 2018

See all articles by Benito Arruñada

Benito Arruñada

Pompeu Fabra University - Department of Economics and Business; Barcelona GSE

Date Written: 2004

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 Classification: K21, K23, J44, L44

Suggested Citation: Suggested Citation

Arruñada, Benito, Managing Competition in Professional Services and the Burden of Inertia (2004). European Competition Law Annual 2004: The Relationship between Competition Law and the (Liberal) Professions, Hart Publishing, Oxford and Portland Oregon, Claus-Dieter Ehlermann and Isabela Atanasiu, eds., pp. 51-71, 2006, Available at SSRN: https://ssrn.com/abstract=859245 or http://dx.doi.org/10.2139/ssrn.859245