The consequences of the adoption of quality standards on the endogenous timing of moves are investigated in a vertically differentiated duopoly. We obtain two main results. First, we prove that, when the low-quality firm is Stackelberg leader in the quality stage, the related MQS is ineffective....

The authors model the introduction of a minimum quality standard in a vertically differentiated duopoly. They extend the literature by determining the standard endogenously, showing that the maximization of social welfare entails an increase in the surplus accruing to consumers served by the low...