Abstract

The market for professional services typically fails due to information asymmetries, externalities, and high transaction cost. Indeed, there is scope for regulation but is regulation always justified on economic terms or also promoted by pressure groups lobbying for favourable legislation? The paper aims at providing some answers to this question, analysing the rationale for regulation and the cost and benefits associated with it. It is shown that although "laissez faire" solutions are indeed problematic, the abolition of some norms - such as minimum tariffs or advertising bans - could be welfare improving.