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Entry and fixed costs in charitable sectors
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Scharf, Kimberly A. (2010) Entry and fixed costs in charitable sectors. Working Paper. Coventry: Centre for Economic Policy Research. CEPR Discussion Paper (No.7978).
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Abstract
Fixed costs that are not sunk do not translate into entry barriers against for-profit competitors. We show that in the case of non-commercial, not- for-profit providers, the presence of fixed costs may protect the position of an inefficient incumbent. In these situations, successfully contesting the position of incumbents may require new providers to adopt a for- profit organizational form – notwithstanding the moral hazard problem that this might entail when quality of provision is difficult to monitor – or, alternatively, to secure core funding from government or from a large private donor.
Item Type: | Working or Discussion Paper (Working Paper) | ||||
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Subjects: | H Social Sciences > HB Economic Theory | ||||
Divisions: | Faculty of Social Sciences > Economics | ||||
Library of Congress Subject Headings (LCSH): | Charities, not-for-profit organizations, core funding | ||||
Series Name: | CEPR Discussion Paper | ||||
Publisher: | Centre for Economic Policy Research | ||||
Place of Publication: | Coventry | ||||
Official Date: | September 2010 | ||||
Dates: |
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Number: | No.7978 | ||||
Status: | Not Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
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