Ensuring quality provision through capacity regulation under price competition
(2010) The B.E. Journal of Theoretical Economics — Vol. 10, n° 1, p. Article 47 (2010)
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- Authors
- Abstract
- We show in a simple duopoly model of vertical differentiation that when a welfare maximizing regulator wishes to ensure entry while avoiding strategic quality underprovision, regulating the incumbent’s capacity is preferable to imposing a “Minimum Quality Standard” on products. In order to establish this result, we make an original contribution to the study of Bertrand-Edgeworth competition in a market with differentiated products.
- Affiliations
Universitat de Girona Departament d'Economia
Citations
Boccard, N., & Wauthy, X. (2010). Ensuring quality provision through capacity regulation under price competition. The B.E. Journal of Theoretical Economics, 10(1), Article 47. https://doi.org/10.2202/1935-1704.1655 (Original work published 2010)