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Quality Bargaining and Intermediate Goods Protection

  • Campbell, Neil
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    This paper offers an explanation for the proposition that removing protection from a firm can induce an improvement in product quality. In a vertically separated industry the quality of the final good is dependent on the quality of the intermediate goods used in its production. This model is used to consider removal of protection from the upstream firm (the supplier) which gives the downstream firm (the assembler) greater bargaining power since the option of turning to a foreign supplier becomes more attractive. Copyright 2001 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

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    Article provided by Wiley Blackwell in its journal Bulletin of Economic Research.

    Volume (Year): 53 (2001)
    Issue (Month): 2 (April)
    Pages: 135-42

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    Handle: RePEc:bla:buecrs:v:53:y:2001:i:2:p:135-42
    Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=0307-3378

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    1. Schmitz, Patrick W., 2001. "The Hold-Up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory," MPRA Paper 12562, University Library of Munich, Germany.
    2. Donnenfeld, Shabtai & Weber, Shlomo & Ben-Zion, Uri, 1985. "Import controls under imperfect information," Journal of International Economics, Elsevier, vol. 19(3-4), pages 341-354, November.
    3. Vousden, Neil & Campbell, Neil, 1994. "The organizational cost of protection," Journal of International Economics, Elsevier, vol. 37(3-4), pages 219-238, November.
    4. Campbell, Neil, 1998. "Can We Believe in Cold Showers?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 13, pages 131-162.
    5. Sheshinski, Eytan, 1976. "Price, Quality and Quantity Regulation in Monopoly Situations," Economica, London School of Economics and Political Science, vol. 43(17), pages 127-37, May.
    6. Das, Satya P. & Donnenfeld, Shabtai, 1989. "Oligopolistic competition and international trade : Quantity and quality restrictions," Journal of International Economics, Elsevier, vol. 27(3-4), pages 299-318, November.
    7. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
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