Quality Certification Standards in Competitive Markets: When Consumers and Producers (Dis)Agree
A quality certification standard in a competitive setting can improve welfare but may affect consumers and producers differently. In a competitive model with quality preferences of the vertical product differentiation type, we find that producers prefer a higher (lower) quality standard than consumers if individual demand functions are log-convex (log-concave).
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|Date of creation:||12 Mar 2009|
|Publication status:||Published in Economics Letters, September 2009, vol. 104 no. 3, pp. 144-147|
|Contact details of provider:|| Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070|
Phone: +1 515.294.6741
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Web page: http://www.econ.iastate.edu
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