We study the influence of minimum quality standards in a two-region partial-equilibrium model of vertical product differentiation and trade. Three alternative standard setting arrangements are considered: Full Harmonization, National Treatment and Mutual Recognition. The analysis integrates the choice of a particular standard setting alternative by governments into the model. We provide a set of sufficient conditions for which Mutual Recognition emerges as one regulatory alternative that always improves welfare in both regions when compared to the case without regulation. We show that Mutual Recognition, being the default procedure if governments do not reach a unanimous decision, is the only possible equilibrium of the game.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number
02-2009.
Length: 31 pages Date of creation: May 2009 Date of revision: Handle: RePEc:icr:wpicer:02-2009
Contact details of provider: Postal: Viale Settimio Severo, 63 - 10133 Torino - Italy Phone: +39 011 6604828 Fax: +39 011 6600082 Email: Web page: http://www.icer.it More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Alessandra Calosso).