Quality, reputation and the choice of organizational form
Vlassopoulos, Michael (2009) Quality, reputation and the choice of organizational form. Journal of Economic Behavior & Organization, 71, (2), 515-527. (doi:10.1016/j.jebo.2009.02.014).
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Description/Abstract
This paper revisits the hypothesis that nonprofit organizations emerge in markets that are characterized by contractual incompleteness because they ensure consumers against opportunistic behavior. We extend the Glaeser and Shleifer [Glaeser, E., Shleifer, A., 2001. Not-for-profit entrepreneurs. Journal of Public Economics 81, 99-115] framework, which studies an entrepreneur's optimal choice of organizational form and service quality when quality is non-contractible into a repeated interaction setting. The main result is that when reputations can be sustained, then for-profit status is the preferred organizational form and high quality services are ensured. This finding suggests that existing explanations of nonprofit organizations that focus entirely on contractual imperfections in the producer/consumer relationship may be inadequate
| Item Type: | Article |
|---|---|
| ISSNs: | 0167-2681 (print) |
| Keywords: | nonprofit status reputation contractual incompleteness |
| Subjects: | H Social Sciences > H Social Sciences (General) |
| Divisions: | University Structure - Pre August 2011 > School of Social Sciences > Economics Faculty of Social and Human Sciences |
| Item ID: | 80161 |
| Date Deposited: | 24 Mar 2010 |
| Last Modified: | 14 Mar 2013 12:02 |
| Contributors: | Vlassopoulos, Michael (Author) |
| Date: | August 2009 |
| Status: | Published |
| URI: | http://eprints.soton.ac.uk/id/eprint/80161 |
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