In a duopoly where two firms' products are differentiated both, horizontally and vertically, introduction of a quality standard affects equilibrium quality levels of both firms. The effects, furthermore, depend upon consumers being or not perfectly informed about qualities. Qualities are...

The present note shows that "innocuous" Minimum Quality Standards, namely standards that are below the lowest quality level observed in the market, may have effects on equilibrium outcomes. In particular this is true in a duopoly where one high quality firm invests in R&D to lower its cost of...

The literature so far has analyzed the effects of Minimum Quality Standards in oligopoly, using models of pure vertical differentiation, with only two firms, and perfect information. We analyze products that are differentiated horizontally and vertically, with imperfect consumers information,...

We study reactions to entry in a Cournot model, contrasting the case where firms are endowed with unchangeable technologies against that where technologies are flexible. By the latter we mean that firms can change the installed production technique at zero cost (fully flexible technologies). We...

It is shown in this paper that there exist cost innovations for which a monopolist has a higher incentive to invest than a social planner. This unveils the limits of the claim, based on Arrow (1959), that a monopoly always has a lower incentive to innovate than a social planner and therefore...

The literature so far has analyzed the effects of Minimum Quality Standards (MQS) in oligopoly, using models of pure vertical differentiation, with only two firms, and perfect information. We consider products that are differentiated horizontally and vertically, with imperfect consumers'...

In the present note we study how the strategic considerations in a duopoly affect the choice by the two firms whether or not to internalize production of an intermediate input. The failure to minimize costs is shown to be a possible outcome of a two-stage game representing the firms' decision...