Positional effects, product quality and regulation in duopoly

Luca Lambertini () and Raimondello Orsini ()

No 2005041, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We investigate positional effects in a vertically differentiated duopoly, evaluated against the first best. Positional concerns distort the allocation of consumers across varieties, as well as the average quality. If the external effect is sufficiently relevant, the resulting welfare loss is increasing in the extent of the externality itself. The beneficial effect of regulation through a minimum quality standard is analysed.

Keywords: Positional externality; status siiking; vertical differential; quality standard (search for similar items in EconPapers)
JEL-codes: D62 L13 L51 (search for similar items in EconPapers)
Pages: 16
Date: 2005-12-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Positional effects, product quality and regulation in duopoly (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvre:2005041

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