TY - UNPB
T1 - Minimum Quality Standards with more than two firms under Cournot competition
AU - Pezzino, Mario
PY - 2006
Y1 - 2006
N2 - The paper studies the effects of the adoption of a Minimum Quality Standard (MQS) in avertically differentiated market. Three identical firms compete in qualities and quantities andface quality dependent fixed costs. After the introduction of a MQS, the average provision ofquality increases in contrast to what has been shown under the assumption of Bertrandcompetition with more than two firms. Total domestic welfare unambiguously decreases if allfirms are domestic, whereas, if foreign firms are allowed to enter the domestic market, theeffects on welfare might be reversed.
AB - The paper studies the effects of the adoption of a Minimum Quality Standard (MQS) in avertically differentiated market. Three identical firms compete in qualities and quantities andface quality dependent fixed costs. After the introduction of a MQS, the average provision ofquality increases in contrast to what has been shown under the assumption of Bertrandcompetition with more than two firms. Total domestic welfare unambiguously decreases if allfirms are domestic, whereas, if foreign firms are allowed to enter the domestic market, theeffects on welfare might be reversed.
KW - vertically differentiated products, minimum quality standards, welfare
M3 - Working paper
T3 - University of Manchester, Economics Discussion Paper Series
BT - Minimum Quality Standards with more than two firms under Cournot competition
ER -