The role of professional designations as quality signals

Using the framework of agency and information theory, Rudolph (1994) argued that the existence of bad appraisals would not necessarily drive out good ones. As long as a market exists for high-quality appraisals, some producers will continue to meet their demand. The issue is reexamined from the pers...

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Bibliographic Details
Published in:The Appraisal journal 1999-04, Vol.67 (2), p.143
Main Authors: Finch, J. Howard, Fogelberg, Larry, Weeks, H. Shelton
Format: Article
Language:English
Subjects:
Appraisals
Appraisers
Commercial real estate
Continuing education
Costs
Game theory
Production increases
Quality management
Real estate appraisal
Real estate appraisers
Reputations
Studies
Valuation
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Summary:Using the framework of agency and information theory, Rudolph (1994) argued that the existence of bad appraisals would not necessarily drive out good ones. As long as a market exists for high-quality appraisals, some producers will continue to meet their demand. The issue is reexamined from the perspective of economic game theory. Appraisers planning to produce high-quality appraisal reports over the long term may use professional designations to signal their intentions to the market. By enhancing client ability to differentiate appraisal quality, these designations increase the market for high-quality appraisal reports.
ISSN:0003-7087