Brekke, Kurt R.; Cellini, Roberto; Siciliani, Luigi; … - Department of Economics and Related Studies, University … - 2008
We investigate the effect of competition on quality in regulated markets (e.g., health care, higher education, public … utilities) taking a di¤erential game approach, in which quality is a stock variable. Using a Hotelling framework, we derive the … the marginal provision cost is increasing, investment and quality are lower in the closed-loop solution: in fact, quality …