On the (Ir)Relevance of Fee Structures in Certification

Pollrich, Martin und Strausz, Roland (24. March 2023): On the (Ir)Relevance of Fee Structures in Certification. Collaborative Research Center Transregio 190, Discussion Paper No. 391

Abstract

Restrictions on certifiers’ fee structures are irrelevant for maximizing their profits and trade efficiency, and for the implementability of (monotone) distributions of rents. The irrelevance results exploit that certification schemes involve two substitutable dimensions—the fee structure and the disclosure rule—and adaptations in the disclosure dimension can mitigate restrictions on the fee dimension. While restrictions on fee structures do affect market transparency, it has no impact on economic efficiency or rent distributions.

• Item Type: Paper
• Keywords: certification; fee structures; disclosure rules; transparency
• Faculties: Economics > Collaborative Research Center Transregio "Rationality and Competition"
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: D82
• Language: English