Is a Minimum Quality Standard Socially Optimal?

This paper explores the role of a minimum quality standard when the quality choice is discrete. A minimum quality standard is never a socially optimal policy under Bertrand and Cournot competition. Conversely, it is often optimal to subsidize or tax the high quality in order to implement different firms' choices corresponding to a situation of welfare maximization.

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Year of publication:	2008-12-14
Authors:	Marette, Stephan
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 12.2008, 39, p. 1-8
Publisher:	AccessEcon

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Extent:	application/pdf
Type of publication:	Article
Classification:	L5 - Regulation and Industrial Policy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010630197