Balan, David J.; Deltas, George - In: International Journal of Industrial Organization 31 (2013) 4, pp. 322-330
We consider a high-quality dominant firm facing a low-quality competitive fringe. We show that the dominant firm's quantity is (weakly) increasing in its quality if and only if its marginal cost (weakly) exceeds that of the fringe; otherwise it is strictly decreasing in quality. This result is...