On the Regulation of A Vertically Differentiated Market

Lambertini, Luca ; Mosca, Manuela (1996) On the Regulation of A Vertically Differentiated Market. Bologna: Dipartimento di Scienze economiche DSE, p. 20. DOI 10.6092/unibo/amsacta/5063. In: Quaderni - Working Paper DSE (247). ISSN 2282-6483.
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Abstract

The aim of this paper is to investigate a vertically differentiated market served either by a multiproduct monopolist or by duopolists, in which a public authority aiming at increasing the welfare level can choose among two instruments, namely, quality taxation/subsidization, and minimum quality standard. In the monopoly case they are equivalent as to the social welfare level, in that both allow the regulator to achieve the second best level of social welfare he would attain if he were to set qualities under the monopoly pricing rule, while they are not equivalent in terms of the distribution of surplus. In the duopoly regime, we show that there exists a taxation/subsidization scheme inducing firms to produce the socially optimal qualities.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Mosca, Manuela
Keywords
vertical product differentiation, taxation/subsidization, minimum quality standard
Subjects
ISSN
2282-6483
DOI
Deposit date
04 Apr 2016 15:03
Last modified
04 Apr 2016 15:03
URI

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