On tariff and quality innovation in a market with discrete preferences
AbstractIn a market for a quality-differentiated good with heterogeneous set of consumers and a local firm facing competitive imports from abroad, we examine private and social incentives for quality innovation. For differential tariff regime, we show that both the private and social gains increase with the tariff protection for the low-quality segment of the domestic market for any given tariff on high-quality imports. But for some very high costs of innovation, the local firm may not undertake a socially desirable innovation. The pro-competitive effect, on the other hand, ensures that quality-distortion-at-the-bottom occurs only for very high levels of tariffs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 29 (2012)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411
Quality innovation; Tariff; Quality distortion; Social gain from innovation;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christoph R. Weiss & Antje Wittkopp, 2005. "Retailer concentration and product innovation in food manufacturing," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(2), pages 219-244, June.
- Srinagesh, Padmanabhan & Bradburd, Ralph M, 1989.
"Quality Distortion by a Discriminating Monopolist,"
American Economic Review,
American Economic Association, vol. 79(1), pages 96-105, March.
- Acharyya, Rajat, 1998. "Monopoly and product quality: Separating or pooling menu?," Economics Letters, Elsevier, vol. 61(2), pages 187-194, November.
- Kim, Joo-Han & Kim, Jae-Cheol, 1996. "Quality choice of multiproduct monopolist and spill-over effect," Economics Letters, Elsevier, vol. 52(3), pages 345-352, September.
- Bhattacharya, Haimanti & Innes, Robert, 2007. "Does Market Concentration Promote or Reduce New Product Introductions? Evidence from US Food Industry," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9352, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Aw, Bee Yan & Roberts, Mark J., 1986. "Measuring quality change in quota-constrained import markets: The Case of U.S. Footwear," Journal of International Economics, Elsevier, vol. 21(1-2), pages 45-60, August.
- White, Lawrence J, 1974. "Industrial Organization and International Trade: Some Theoretical Considerations," American Economic Review, American Economic Association, vol. 64(6), pages 1013-20, December.
- Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December.
- Swapnendu Bandyopadhyay & Rajat Acharyya, 2004. "Process and Product Innovation: Complementarity in a Vertically Differentiated Monopoly with Discrete Consumer Types," The Japanese Economic Review, Japanese Economic Association, vol. 55(2), pages 175-200.
- L. Lambertini & R. Orsini, 2000.
"Process and Product Innovation in a Vertically Differentiated Monoply,"
367, Dipartimento Scienze Economiche, Universita' di Bologna.
- Lambertini, Luca & Orsini, Raimondello, 2000. "Process and product innovation in a vertically differentiated monopoly," Economics Letters, Elsevier, vol. 68(3), pages 333-337, September.
- Rajat Acharyya & Swapnendu Bandyopadhyay(Banerjee), 2004.
"Does Input Sector Liberalization Promote Quality Innovation and Exports?,"
Econometric Society 2004 Far Eastern Meetings
650, Econometric Society.
- Bandyopadhyay, Swapnendu & Acharyya, Rajat, 2006. "Does input sector liberalization promote quality innovation and exports?," International Review of Economics & Finance, Elsevier, vol. 15(4), pages 443-462.
- Gabszewicz, Jean J. & Wauthy, Xavier Y., 2002.
"Quality underprovision by a monopolist when quality is not costly,"
Elsevier, vol. 77(1), pages 65-72, September.
- GABSZEWICZ, Jean & WAUTHY, Xavier, . "Quality underprovision by a monopolist when quality is not costly," CORE Discussion Papers RP -1573, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
- Subodh, Kandamuthan, 2002. "Market Concentration, Firm Size and Innovative Activity: A Firm-level Economic Analysis of Selected Indian Industries under Economic Liberalization," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Acharyya, Rajat, 2005. "Quality discrimination among income constrained consumers," Economics Letters, Elsevier, vol. 86(2), pages 245-251, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.