Minimum Quality Standards and Collusion

Ecchia, Giulio ; Lambertini, Luca (1995) Minimum Quality Standards and Collusion. Bologna: Dipartimento di Scienze economiche DSE, p. 18. DOI 10.6092/unibo/amsacta/5078. In: Quaderni - Working Paper DSE (235). ISSN 2282-6483.
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Abstract

We model the introduction of a minimum quality standard in a vertically differentiated duopoly. We extend the literature in determining the standard endogenously, showing that the maximisation of social welfare entails an increase in the surplus accruing to consumers served by the low quality firm and a decrease in the surplus of the remaining consumers. Then, we consider the effects of the standard on the stability of price collusion, proving that the standard makes it more difficult for firms to collude if consumers are sufficiently rich.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Ecchia, Giulio
Lambertini, Luca
Keywords
minimum quality standard, collusion, cartel stability
Subjects
ISSN
2282-6483
DOI
Deposit date
28 Apr 2016 09:51
Last modified
28 Apr 2016 09:51
URI

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