We analyze the effect of product quality on the output of a high-quality dominant firm facing a low-quality competitive fringe. We show that profit maximizing output decreases with product quality when the dominant firm's marginal cost is lower than that of the fringe, is independent of quality...

We consider a high-quality dominant firm facing a low-quality competitive fringe. We show that the effect of an increase in the dominant firm's product quality on its equilibrium quantity depends on its marginal cost relative to that of the fringe firms. The dominant firm's output increases in...

We develop a parametric model in which a high-quality dominant firm faces a low-quality competitive fringe. We show that in this model, an increase in the dominant firm's product quality increases total welfare and consumer surplus. An increase in fringe firm quality has an ambiguous effect on...

This paper incorporates morality-defined as lower utility from consuming goods obtained through appropriative rather than productive activities-into a simple static general equilibrium model in which agents choose whether to be producers or appropriators. The authors analyze the relationship...