The literature so far has analyzed the effects ofminimum quality standards (MQS) in oligopoly, usingmodels of pure vertical differentiation, with only two firms, and perfect information. We consider 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. Our analysis justifies the use ofMQSin industrieswhere consumers cannot precisely ascertain the quality of goods, for instance pharmaceuticals or products with chemical components involved.
|Titolo:||Minimum quality standards and consumers information|
GARELLA, PAOLO (Primo)
|Parole Chiave:||Horizontal and vertical product differentiation; Imperfect consumer information; Industry regulation; Minimum quality standards; Oligopoly|
|Settore Scientifico Disciplinare:||Settore SECS-P/01 - Economia Politica|
|Data di pubblicazione:||2008|
|Digital Object Identifier (DOI):||10.1007/s00199-007-0269-9|
|Appare nelle tipologie:||01 - Articolo su periodico|