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Pleasures of Cockaigne: a Story of Quality Gaps, Market Structure and Demand for Grading Services

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  • HOLLANDER, Abraham
  • MONIER, Sylvette
  • OSSARD, Hervé

Abstract

This paper explores under what circumstances high-quality producers would not voluntarily submit grading when low-quality firms would readily do sa, and under what conditions high-quality firms would have a lesser proportion if their ouput graded than low-quality counterparts. It also investigates how market structure affects the decision to engage in grading. in thsi regard, the paper establishes how the prices of graded as well as ungraded output varies with the amount of output graded and the extent to which market structure determines whether the amounts graded by individual firms will yield an industry outcome, which is optimal from a social welfare point of view.

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Bibliographic Info

Paper provided by Universite de Montreal, Departement de sciences economiques in its series Cahiers de recherche with number 9804.

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Length: 19 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:mtl:montde:9804

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