This paper examines the effects of the imposition of minimum quality standards (MQS) on a vertically differentiated natural duopoly with free entry. It is shown that the welfare effects of MQS are crucially dependent upon the timing of the quality choice with respect to the decision to enter the...

In this paper, we analyze cases where consumers are aware of the existence of two qualities but do not know which firm sells the good one. We show that if the production of the high quality requires higher cost, its producer may be severly disadvantaged, even if the additional utility fully...

Gina an industry producing a single product of varying qualities within a technologically feasible compact set, we examine the choice of qualities of a monopolist. We focus on the case where the consumers' income distribution is sufficiently wide as to rule out the case of natural monopoly and...

This paper deals with the consequences of setting a label, on both firms?' price strategies in the case of credence goods. We demonstrate that the high quality firm may be better off in the absence of label.Classification JEL : D82, L15

When the market of tradable emissions permits is perfectly competitive, free allocation of permits through some discretionary rules corresponds to lump sum transfers and cannot have strategic effects. This conclusion is reversed when transactions costs are introduced in the TEP market....

Are labels good or bad for consumers and firms? The answer may seem straightforward since labels improve information, yet economic theory reveals situations where their introduction reduces the welfare of at least some market participants. This essay reviews the theoretical literature on labels...

We examine the interaction between financial and microeconomic decisions in a differentiated duopoly where additional willingness-to-pay for high quality is uncertain. Product specification is endogenous. We consider two three-stage games, according to the order of moves: qualities-financial...