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The Optimal Regulation of Product Quality under Monopoly

Author

Listed:
  • Hans Zenger

    (University of Munich)

Abstract

This paper characterizes the optimal quality regulation of a monopolist when quality is observable. In contrast to Sheshinski (1976) it is shown that a minimum quality standard may be desirable even if it induces the firm to reduce output.

Suggested Citation

  • Hans Zenger, 2006. "The Optimal Regulation of Product Quality under Monopoly," Economics Bulletin, AccessEcon, vol. 12(13), pages 1-4.
    • Handle: RePEc:ebl:ecbull:eb-06l10029
    as

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    References listed on IDEAS

    as
    1. David Besanko & Shabtai Donnenfeld & Lawrence J. White, 1987. "Monopoly and Quality Distortion: Effects and Remedies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(4), pages 743-767.
    2. Sheshinski, Eytan, 1976. "Price, Quality and Quantity Regulation in Monopoly Situations," Economica, London School of Economics and Political Science, vol. 43(17), pages 127-137, May.
    3. David Sappington, 2005. "Regulating Service Quality: A Survey," Journal of Regulatory Economics, Springer, vol. 27(2), pages 123-154, November.
    4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    5. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monopoly;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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