Minimum quality standards in hedonic markets with environmental externalities

Giulio Ecchia, Luca Lambertini, Alessandro Tampieri

We investigate the introduction of a minimum quality standard (MQS) in a vertically differentiated duopoly with an environmental externality. We establish that the MQS bites only if the hedonic component of consumer preferences is sufficiently strong. Then, we illustrate an underlying tradeoff between the beneficial effects of quality enhancement on prices and the associated undesirable increase in the environmental externality.

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Year of publication:	February 4, 2011
Authors:	Ecchia, Giulio ; Lambertini, Luca ; Tampieri, Alessandro
Publisher:	Bologna, Italy : Alma Mater Studiorum - Università di Bologna, Department of Economics
Subject:	MQS \| environmental externality \| product quality \| Produktqualität \| Product quality \| Externer Effekt \| Externalities \| Theorie \| Theory \| Hedonischer Preisindex \| Hedonic price index \| Standardisierung \| Standardization \| Umweltbelastung \| Pollution \| Umweltökonomik \| Environmental economics \| Produktdifferenzierung \| Product differentiation \| Duopol \| Duopoly

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