Vertical Product Differentiation, Quality Standards, and International Trade Policy
AbstractThis paper studies the influence of minimum quality standards in a partial-equilibrium model of vertical product differentiation and trade in which duopolistic firms face quality-dependent costs and compete on quality and price in two segmented markets. Three alternative standard setting arrangements are Full Harmonization, National Treatment and Mutual Recognition. Under these alternatives, standards can be found that increase welfare in both regions. The analysis integrates the governments’ choice of a particular standard setting alternative into the model. Mutual Recognition emerges as one regulatory alternative that always improves welfare in both regions when compared to the case without regulation. Under certain cost conditions, both regions will prefer Mutual Recognition over the alternatives.
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.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1443.
Date of creation: Jul 1996
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Lutz, Stefan, 1996.
"Vertical Product Differentiation and Entry Deterrence,"
CEPR Discussion Papers
1455, C.E.P.R. Discussion Papers.
- Stefan Lutz, 1997. "Vertical product differentiation and entry deterrence," Journal of Economics, Springer, vol. 65(1), pages 79-102, February.
- T.Huw Edwards, 2007. "Horizontal Regulatory Protection. Its appeal and implictions in a linear Cournot duopoly," Discussion Paper Series 2007_05, Department of Economics, Loughborough University, revised Feb 2007.
- Huw Edwards & Joanna Poyago-Theotoky, 2013.
"Regulatory Protection When Firms Decide First on Technical Collaboration and R&D,"
Review of International Economics,
Wiley Blackwell, vol. 21(4), pages 750-764, 09.
- Joanna Poyago-Theotoky & Huw Edwards, 2012. "Regulatory protection when firms decide first on technical collaboration and R&D," Working Papers 2012.05, School of Economics, La Trobe University.
- Lutz, Stefan, 2003.
"Mutual Recognition of National Minimum Quality Standards may Support International Convergence,"
ZEW Discussion Papers
03-17, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Stefan Lutz & Mina Baliamoune-Lutz, 2003. "Mutual Recognition of National Minimum Quality Standards may Support International Convergence," Journal of Industry, Competition and Trade, Springer, vol. 3(4), pages 293-311, December.
- T. Huw Edwards, 2004. "Trade and Strategic Regulatory Bias in Monopolistic Industries," Discussion Paper Series 2004-21, Department of Economics, Loughborough University, revised Sep 2004.
- Lutz, Stefan H., 2002.
"The Effects of Quotas on Vertical Intra-Industry Trade,"
ZEW Discussion Papers
02-61, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Lutz, Stefan, 2002. "The effects of quotas on vertical intra-industry trade," ZEI Working Papers B 24-2002, ZEI - Center for European Integration Studies, University of Bonn.
- Lutz, Stefan, 2003. "International Coordination of Quality Standards and Vertical Product Differentiation," ZEW Discussion Papers 03-41, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- T.Huw Edwards, 2009. "Regulatory Protection When Firms Move First," Discussion Paper Series 2009_19, Department of Economics, Loughborough University, revised Nov 2009.
- Werner Smolny, 2003. "Determinants of innovation behaviour and investment estimates for west-german manufacturing firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(5), pages 449-463.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.