Are "innocuous" Minimum Quality Standards really innocuous?

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 quality improvements. A Standard that is below, but close to, the lowest quality observed in the market reduces the incentive to invest by the quality leading firm.

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Year of publication:	2004
Authors:	Garella, Paolo G.
Publisher:	Bologna : Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
Subject:	Produktqualität \| Standardisierung \| Oligopol \| Produktdifferenzierung \| Forschung \| Theorie

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Series:	Quaderni - Working Paper DSE ; 515
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	10.6092/unibo/amsacta/4777 [DOI] 392496976 [GVK] hdl:10419/159356 [Handle] RePEc:bol:bodewp:515 [RePEc]
Source:	EconStor

Persistent link: https://www.econbiz.de/10011651409