Positional effects, product quality and regulation in duopoly
AbstractWe investigate positional effects in a vertically differentiated duopoly, evaluated against the first best. Positional concerns distort the allocation of consumers across varieties, as well as the average quality. If the external effect is sufficiently relevant, the resulting welfare loss is increasing in the extent of the externality itself. The beneficial effect of regulation through a minimum quality standard is analysed.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (REL - Recherches Economiques de Louvain) with number 2005041.
Date of creation: 01 Dec 2005
Date of revision:
Positional externality; status siiking; vertical differential; quality standard;
Other versions of this item:
- Luca Lambertini & Raimondello Orsini, 2005. "Positional effects, product quality and regulation in duopoly," Recherches économiques de Louvain, De Boeck Université, vol. 71(4), pages 367-381.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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