We consider an oligopolistic market where firms compete in price and quality and where consumers are heterogeneous in …-inefficiency of the price/quality offers. But, better price/quality combinations are signalled with lower prices in one type and with …

affected by these price effects, even in this setting where program eligibility is high, the transfer per household is sizeable …, and hence the supply influx is large. The exception is in remote villages, where the price effects (both the negative …