Price and quality competition
AbstractThis study considers an oligopoly model with simultaneous price and quality choice. Ex-ante homogeneous sellers compete by offering products at one of two quality levels. The consumers have heterogeneous tastes for quality: for some consumers it is efficient to buy a high quality product, while for others it is efficient to buy a low quality product. In the symmetric equilibrium firms use mixed strategies that randomize both price and quality, and obtain strictly positive profits. This framework highlights trade-offs which determine the impact of consumer protection policy in the form of quality standards. Copyright Springer-Verlag 2012
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economics.
Volume (Year): 107 (2012)
Issue (Month): 1 (September)
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Web page: http://www.springerlink.com/link.asp?id=108909
Oligopoly; Price and quality competition; Quality standards; L13; L15; L50;
Other versions of this item:
- L5 - Industrial Organization - - Regulation and Industrial Policy
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- 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.:
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"Duopoly and Quality Standards,"
Cahiers de recherche
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