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SUMMARY:Regulation of Charlatans in High-Skill Professions
DTSTART:20180119T103000
DTEND:20180119T120000
DTSTAMP:20260428T074200Z
UID:cfb6194fa809b7c90f2feff69d4a2ec49e353e35e133f488f6d7b48e
CATEGORIES:Conferences - Seminars
DESCRIPTION:Jonathan BERK (Stanford Graduate School of Business)\nWe study
  a market for a skill that is in short supply and high demand\, where the 
 presence of charlatans (professionals who sell a service that they do not 
 deliver on) is an equilibrium outcome. We use this model to evaluate the b
 elief that reducing the number of charlatans through regulation increases 
 consumer surplus. We show that this belief is false: both information disc
 losure as well as setting standards reduces consumer surplus. Although bot
 h standards and disclosure drive charlatans out of the market\, consumers 
 are worse o because of the resulting reduction in competition amongst prod
 ucers. Producers\, on the other hand\, strictly benefit from the regulatio
 n\, implying that the regulation we observe in these markets likely derive
 s from producer interests. The model provides insights into the parameters
  that drive the cross-sectional variation in charlatans across professions
 . Professions with weak trade groups\, skills in larger supply\, shorter t
 raining periods and less informative signals regarding the professional's 
 skill\, are more likely to feature charlatans. We conclude that the number
  of charlatans in equilibrium is positively related to the value added of 
 that profession to consumers.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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