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Ensuring Quality Provision through Capacity Regulation under Price Competition
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Nicolas Boccard
Published/Copyright:
October 27, 2010
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.
Published Online: 2010-10-27
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Keywords for this article
quality;
minimum quality standards;
price competition;
capacity
Articles in the same Issue
- Topics Article
- Endogenous Investment and Pricing under Uncertainty
- Information Revelation in Markets with Pairwise Meetings: Complete Revelation in Dynamic Analysis
- Optimal Screening by Risk-Averse Principals
- Coordination under the Shadow of Career Concerns
- The Optimal Accuracy Level in Asymmetric Contests
- The Fragmentation of Reputation
- Sharing Risk Efficiently under Suboptimal Punishments for Defection
- Advice from Multiple Experts: A Comparison of Simultaneous, Sequential, and Hierarchical Communication
- Contractual Incompleteness for External Risks
- On Delegation in Contests and the Survival of Payoff Maximizing Behavior
- Optimal Quality Scores in Sponsored Search Auctions: Full Extraction of Advertisers' Surplus
- A Theory of Credibility under Commitment
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- Social Learning in Social Networks
- A Note on the Multidimensional Monopolist Problem and Intertemporal Price Discrimination
- A Note on Rationalizability and Restrictions on Beliefs
- Vote or Shout
- Asymmetry and Collusion in Sequential Procurement: A "Large Lot Last" Policy
- Status, Inequality and Intertemporal Choice
- Designing the Efficient Information-Processing Organization
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- Successive Oligopolies and Decreasing Returns
- Advice by an Informed Intermediary: Can You Trust Your Broker?
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- Linear Demand Systems are Inconsistent with Discrete Choice
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