Quality Certification Standards in Competitive Markets: When Consumers and Producers (Dis)Agree

A quality certification standard in a competitive setting can improve welfare but may affect consumers and producers differently. In a competitive model with quality preferences of the vertical product differentiation type, we find that producers prefer a higher (lower) quality standard than consumers if individual demand functions are log-convex (log-concave).

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Year of publication:	2009-03-12
Authors:	Lapan, Harvey E. ; Moschini, GianCarlo
Institutions:	Department of Economics, Iowa State University
Subject:	Comparative statics \| log-concavity \| minimum quality standards \| quality certification \| vertical product differentiation

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Series:	Staff General Research Papers.
Type of publication:	Book / Working Paper
Notes:	Published in Economics Letters, September 2009, vol. 104 no. 3, pp. 144-147
Classification:	D40 - Market Structure and Pricing. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005441785