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On MQS regulation, innovation and market coverage

Author

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  • E. Bacchiega
  • L. Lambertini
  • A. Mantovani

Abstract

We revisit Maxwell’s (1998) analysis to show that MQS regulation has no effects on the high-quality firm’s incentive to adopt a more efficient technology in a vertically differentiated duopoly with full market coverage and convex costs of quality improvements which are independent of the scale of production.

Suggested Citation

  • E. Bacchiega & L. Lambertini & A. Mantovani, 2006. "On MQS regulation, innovation and market coverage," Working Papers 575, Dipartimento Scienze Economiche, Universita' di Bologna.
  • Handle: RePEc:bol:bodewp:575
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    References listed on IDEAS

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    1. Crampes, Claude & Hollander, Abraham, 1995. "Duopoly and quality standards," European Economic Review, Elsevier, vol. 39(1), pages 71-82, January.
    2. Garella, Paolo G., 2006. ""Innocuous" minimum quality standards," Economics Letters, Elsevier, vol. 92(3), pages 368-374, September.
    3. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    4. Uri Ronnen, 1991. "Minimum Quality Standards, Fixed Costs, and Competition," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 490-504, Winter.
    5. Maxwell, John W., 1998. "Minimum quality standards as a barrier to innovation," Economics Letters, Elsevier, vol. 58(3), pages 355-360, March.
    6. Ecchia, Giulio & Lambertini, Luca, 1997. "Minimum Quality Standards and Collusion," Journal of Industrial Economics, Wiley Blackwell, vol. 45(1), pages 101-113, March.
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    Cited by:

    1. Sang-Ho Lee & Ram Kumar Phuyal, 2013. "Strategic Entry Deterrence by Limiting Qualities under Minimum Quality Standards," The Japanese Economic Review, Japanese Economic Association, vol. 64(4), pages 550-563, December.
    2. Hattori, Keisuke & Higashida, Keisaku, 2014. "Misleading advertising and minimum quality standards," Information Economics and Policy, Elsevier, vol. 28(C), pages 1-14.
    3. Ya-chin Wang & Leonard f.s. Wang, 2009. "Equivalence Of Competition Mode In A Vertically Differentiated Duopoly With Delegation," South African Journal of Economics, Economic Society of South Africa, vol. 77(4), pages 577-590, December.

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