Parallel trade, product quality, and welfare

Giorgio Matteucci () and Pierfrancesco Reverberi ()
Additional contact information
Giorgio Matteucci: Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"
Pierfrancesco Reverberi: Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"

No 2013-14, DIAG Technical Reports from Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"

Abstract: We study the welfare effects of parallel trade (PT) considering investment in quality. We thus revisit the case for allowing PT in research-intensive industries. We find that quality may be higher with than without PT, depending on how consumers’ preferences for quality differ across countries. Conditional on quality, consumer surplus may rise in the source country, or fall in the destination country of PT. We find that PT reduces ex post welfare, and improving quality is a necessary (and sometimes sufficient) condition for PT to increase welfare ex ante.

Keywords: Parallel trade; Price discrimination; R&D investment; Intellectual property rights (search for similar items in EconPapers)
Pages: 13 pages
Date: 2013
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind and nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.dis.uniroma1.it/~bibdis/RePEc/aeg/report/2013-14.pdf Revised version, 2013 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aeg:report:2013-14

Access Statistics for this paper

More papers in DIAG Technical Reports from Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza" Contact information at EDIRC.
Bibliographic data for series maintained by Antonietta Angelica Zucconi ( this e-mail address is bad, please contact ).