Garella, Paolo G. ;
Petra, Emmanuel
(2004)
Minimum Quality Standards and Consumers Information.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 15.
DOI
10.6092/unibo/amsacta/4758.
In: Quaderni - Working Paper DSE
(532).
ISSN 2282-6483.
Full text available as:
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
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.
Document type
Monograph
(Working Paper)
Creators
Keywords
Regulation, Minimum Quality Standards, Oligopoly, Product
Differentiation, Asymmetric Information
Subjects
ISSN
2282-6483
DOI
Deposit date
15 Mar 2016 09:47
Last modified
15 Mar 2016 09:47
URI
Other metadata
Document type
Monograph
(Working Paper)
Creators
Keywords
Regulation, Minimum Quality Standards, Oligopoly, Product
Differentiation, Asymmetric Information
Subjects
ISSN
2282-6483
DOI
Deposit date
15 Mar 2016 09:47
Last modified
15 Mar 2016 09:47
URI
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