LE Europe’s Dr Paula Ramada and Rhys Williams presented ongoing work to the OECD’s workshop on Regulatory Barriers to Competition in Professional Services. They discussed ongoing work for the European Commission’s DG GROW developing a theoretical framework to better understand the underlying features which may affect professional business services markets and how this can affect effective competition, with resulting effects on market outcomes. More precisely, the framework outlines which conditions are required for effective competition on both the consumer and supplier side and then highlights features, or specificities, of some PBS markets which can inhibit effective competition. Such features can include information asymmetries, multi-dimensionality of consumer preferences, infrequent purchasing and significant relationship specific investments. The relationship between effective competition and market outcomes is then explored in more detail. Finally, the possibility for market-based solutions to rectify this situation is discussed and the relevance in relation to PBS markets is explored.
More details can be found in the presentation and working paper presented at the workshop, available here.