ΠΑΝΕΠΙΣΤΗΜΙΟ ΠΕΙΡΑΙΩΣ
ΣΧΟΛΗ ΧΡΗΜΑΤΟΟΙΚΟΝΟΜΙΚΗΣ ΚΑΙ ΣΤΑΤΙΣΤΙΚΗΣ
ΤΜΗΜΑ ΧΡΗΜΑΤΟΟΙΚΟΝΟΜΙΚΗΣ ΚΑΙ ΤΡΑΠΕΖΙΚΗΣ ΔΙΟΙΚΗΤΙΚΗΣ

UNIVERSITY OF PIRAEUS
SCHOOL OF FINANCE AND STATISTICS
DEPARTMENT OF BANKING AND FINANCIAL MANAGEMENT

The Department of Banking and Financial Management announces the upcoming seminar with
Prof. Jonathan Berk, Stanford Business School

“Regulation of Charlatans in High-Skill Professions”

Seminar Organizers: Assist. Prof. Michail Anthropelos, Prof. George Skiadopoulos
Supported by Piraeus Bank

Abstract: We model a market for a skill that is in short supply and high demand, where the presence of charlatans (professionals who sell a service that they do not deliver on) is an equilibrium outcome. We use this model to evaluate the standards and disclosure requirements that exist in these markets. We show that reducing the number of charlatans through regulation decreases consumer surplus. Although both standards and disclosure drive charlatans out of the market, consumers are worse off because of the resulting reduction in competition amongst producers. Producers, on the other hand, strictly benefit from the regulation, implying that the regulation we observe in these markets likely derives from producer interests. Using these insights, we study the factors that drive the cross-sectional variation in charlatans across professions. Professions with weak trade groups, skills in larger supply, shorter training periods and less informative signals regarding the professional’s skill, are more likely to feature charlatans.

Jonathan Berk is the A.P. Giannini Professor of Finance at the Stanford Graduate School of Business (GSB). His research is primarily theoretical in nature and covers a broad range of topics in finance, including delegated money management; the pricing of financial assets; valuing a firm’s growth potential; the capital structure decision; and the interaction between labor markets and financial markets. He has also explored individual rationality in an experimental setting. He has coauthored two finance textbooks: Corporate Finance and Fundamentals in Finance.  His research is internationally recognized and has won numerous awards, including the Stephen A. Ross Prize in Financial Economics, the TIAA-CREF Paul A. Samuelson Award, the Smith Breeden Prize, Best Paper of the Year in the Review of Financial Studies, and the FAME Research Prize.