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This article documents the price and quality effects of a state-mandated market restriction that required nonprice competition and prohibited price competition among auditors. The article examines the issue from an industrial organization perspective, with particular emphasis on capture theory. The article analyzes Section 478.317, Florida Statutes, which mandated that proposals to perform an audit should not include fee information and specified the procedure to be used to select an external auditor. The article finds that municipalities in the bidding-restriction market paid higher audit fees, engaged audit firms with larger municipal audit client bases, and were more likely to be recognized for excellence in financial reporting than other municipalities.