Imprecise information disclosure and truthful certification

Frequent audits and honest audits

“…In their model, the relationship between the regulator and the applicant is not mediated by a (corruptible) auditor. In Pollrich and Wagner (2016) instead, collusion takes place between a certifier (which plays the role of the auditor in our model) and a sequence of applicants. In their model there is no benevolent regulator who designs the auditing policy and pays transfers to the certifier.…”

The Irrelevance of Fee Structures for Certification

“…. (2012),Lizzeri (1999),Loerke & Niedermayer (2018), endogenousOpp et al (2013),Pollrich & Wagner (2016),Viscusi (1978) flatBolton et al (2012),Bouvard & Levy (2018),Durbin (1999), exogenous Farhi et al (2013), Mathis et al (2009), Skreta & Veldkamp (2009), Stahl & Strausz (2017), Strausz (2005) endogenous Faure-Grimaud et al (2009), Kovbasyuk (2018) certificate Fulghieri et al (2014), Bar-Isaac & Shapiro (2013…”

“…We abstract from any moral hazard problems of certification and refer for such considerations to Ozerturk (2014) andBizzotto and Vigier (2021).6 For papers that focus on the market transparency effect of certification seePollrich and Wagner (2016),Stahl and Strausz (2017),Harbaugh and Rasmusen (2018), andKattwinkel and Knoepfle (2022).7 Because in the canonical adverse selection setup, trade takes place at a price that equals the buyer's expected willingness to pay, buyer-rents are always zero.…”