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This paper characterizes the optimal quality regulation of a monopolist when quality is observable. In contrast to …
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analysis considers some wider issues including the implications for product investment and industry self-regulation. …
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The Pennsylvania Liquor Control Board administers the purchase and sale of wine and spirits and is mandated to charge a uniform 30% markup on all products. We use an estimated discrete choice model of demand for spirits, together with information on wholesale prices, to assess the implications...
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