Static Costs vs. Dynamic Benefits of a Minimum Quality Standard under Cournot Competition

Imposing a minimum quality standard (MQS) is conventionally regarded as harmful if firms compete in quantities. This, however, ignores dynamic effects. We show that an MQS can hinder collusion, resulting in dynamic welfare gains that reduce and may even outweigh the usual static losses. Verdicts on MQS thus depend even more on the market at hand than has been acknowledged.

MoreLess

Year of publication:	2007
Authors:	Napel, Stefan ; Oldehaver, Gunnar
Publisher:	Turku : Aboa Centre for Economics (ACE)
Subject:	minimal quality standard \| Cournot competition \| collusion

More details

Series:	Discussion paper ; 23
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	hdl:10419/233239 [Handle] RePEc:tkk:dpaper:dp23 [RePEc]
Classification:	L41 - Monopolization; Horizontal Anticompetitive Practices ; L51 - Economics of Regulation ; L15 - Information and Product Quality; Standardization and Compatibility ; D43 - Oligopoly and Other Forms of Market Imperfection
Source:	EconStor

Persistent link: https://ebvufind01.dmz1.zbw.eu/10012502977