Minimum quality standards and consumers’ information

Garella, Paolo G. ; Petrakis, Emmanuel (2004) Minimum quality standards and consumers’ information. p. 17. DOI 10.6092/unibo/amsacta/1583.
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Abstract

The literature so far has analyzed the effects of Minimum Quality Standards in oligopoly, using models of pure vertical differentiation, with only two firms, and perfect information. We analyze products that are differentiated horizontally and vertically, with imperfect consumers information, and more than two firms. We show that a MQS changes the consumers’ perception of produced qualities. This increases the firms’ returns from quality enhancing investments, notwithstanding contrary strategic effects. As a consequence, MQS policies may be desirable as both, firms and consumers, can gain. This contrasts with previous results in the literature and provides a justification for the use of MQS to improve social welfare.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Garella, Paolo G.
Petrakis, Emmanuel
Keywords
Regulation, minimum quality standards, oligopoly, product
Subjects
DOI
Deposit date
16 Feb 2006
Last modified
17 Feb 2016 14:33
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