Regulating quality by regulating quantity: a case against minimum quality standards

Boccard, Nicolas;Wauthy, Xavier
(2009)

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Abstract
We show in a simple model of entry with sunk cost, that a regulator prefers limiting the output, or capacity, of the incumbent firm rather than imposing a “Minimum Quality Standard” in order to help the entrant to provide high quality. As a by-product, our analysis makes a contribution to the study of Bertrand-Edgeworth competition in a market with differentiated products.
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  • University of GironaDepartament d'Economia

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Boccard, N., & Wauthy, X. (2009). Regulating quality by regulating quantity: a case against minimum quality standards (CORE Discussion Papers 2009/52). https://hdl.handle.net/2078.5/250263