QUALITY CHOICE, SALES RESTRICTION AND THE MODE OF COMPETITION

Nicolas Boccard () and Xavier Wauthy

Manchester School, 2006, vol. 74, issue 1, 64-84

Abstract: A regulator imposing sales restrictions or capacity limitation on firms competing in oligopolistic markets may enhance quality provision by these firms. The instrument amounts to protecting entrants or low‐quality firms; this in turn makes it profitable to sink money into quality upgrades. Moreover, for most restrictions levels, the impact on quality selection is invariant to the mode of competition.

Date: 2006
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https://doi.org/10.1111/j.1467-9957.2006.00483.x

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Working Paper: Quality choice, sales restriction and the mode of competition (2006)
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