Minimum Quality Standards under Cournot Competition
I study the consequences of imposing a minimum quality standard on an industry in which firms first incur fixed quality development costs and subsequently compete over quantity. I find that a mildly restrictive minimum quality standard unambiguously reduces total welfare, in contrast to previous findings derived in the literature where it is assumed that firms compete over prices. Copyright 2000 by Kluwer Academic Publishers
Volume (Year): 18 (2000)
Issue (Month): 3 (November)
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