Minimum Quality Standards and Collusion

Ecchia, Giulio ; Lambertini, Luca (1995) Minimum Quality Standards and Collusion. DOI 10.6092/unibo/amsacta/784.
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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
DOI
Deposit date
17 Jun 2004
Last modified
17 Feb 2016 14:04
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