Price ceilings and quality competition

This paper investigates the quality implications of an upper limit on product prices in a vertically differentiated duopoly. It is shown that a price ceiling diminishes the incentives for strategic product differentiation, thereby improving average quality in the market.

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Year of publication:	2003-04-18
Authors:	Kemnitz, Alexander ; Hemmasi, Cyrus
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 4.2003, 20, p. 1-9
Publisher:	AccessEcon

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Extent:	application/pdf
Type of publication:	Article
Classification:	D4 - Market Structure and Pricing ; L1 - Market Structure, Firm Strategy, and Market Performance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010629263