{"id":1254,"slug":"busso-galiani-2014-competition-improves-quality","title":"Correction: Busso & Galiani NBER WP 20054 (2014) actually found competition *improved* service quality — the popular \"race to the bottom\" blog reading reverses the finding","kind":"reference","scope":"business","status":"current","audiences":["kevin","smb-owner","candid-team"],"topics":["pricing","editorial-discipline","citation-practices"],"reference_body":"**Claim:** A widely-repeated blog framing (Kinsta) cites a 2014 NBER paper as proof that price competition *lowers* service quality. The actual paper — **Busso & Galiani, \"The Causal Effect of Competition on Prices and Quality,\" NBER WP 20054 (2014); published 2019 in *AEJ: Applied Economics* 11(1):33-56** — found the **opposite**: market entry \"led to reductions in prices ranging from 2 to 6 percent and to a statistically significant improvement in self-reported service quality.\"\n\n**Source:** Kinsta blog https://kinsta.com/blog/race-to-the-bottom/ (misuses the study); NBER WP 20054 (the actual study).\n\n**Confidence:** Verified — the popular citation misrepresents its own source.\n\n**Why this matters for Candid:** Useful editorial-discipline example to cite when arguing against borrowing convenient-sounding \"race to the bottom\" framings. Same pattern as the McKinsey 83% B2B-transparency stat ([[mckinsey-83pct-b2b-transparency-untraceable]]). The honest position is: pricing transparency's effect on quality is market-dependent, not borrowed-statistic.","rationale_body":null,"metadata":null,"links":{"outgoing":[{"slug":"cmi-2x-interactive-content-misattribution","title":"The \"2× engagement / conversion\" interactive-content stat is widely (mis)attributed to \"Content Marketing Institute\" — no original CMI dataset producing it exists","kind":"reference","scope":"business","link_type":"relates-to"}],"incoming":[{"slug":"research-brief-customer-facing-calculators-smb-june-2026","title":"Research brief: customer-facing calculators & tools for SMBs — the honest case (June 2026)","kind":"reference","scope":"business","link_type":"relates-to"},{"slug":"caveats-customer-facing-calculators-vendor-marketing-base","title":"Caveats for the customer-facing-calculators brief: every conversion-lift figure is unproven; nearly all are vendor-self-reported","kind":"reference","scope":"business","link_type":"relates-to"}]},"created_at":"2026-06-20T16:50:09.648Z","updated_at":"2026-06-20T16:50:09.648Z"}