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Lambertini, Luca ; Ecchia, Giulio
(1997)
Full vs Partial Market Coverage with Minimum Quality Standards.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 16.
DOI 10.6092/unibo/amsacta/5025.
In: Quaderni - Working Paper DSE
(285).
ISSN 2282-6483.
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Abstract
The consequences of the adoption of quality standards on the extent of market coverage is investigated by modelling a game between regulator and low-quality firm in a vertically differentiated duopoly. The game has a unique equilibrium in the most part of the parameter range. There exists a non-negligible range where the game has no equilibrium in pure strategies. This result questions the feasibility of MQS regulation when firms endogenously determine market coverage.
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