That is the paradoxical conclusion of an economic model built by
Berk et al.:
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.
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