Price ceilings and quality competition

Alexander Kemnitz and Cyrus Hemmasi ()
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Cyrus Hemmasi: University of Mannheim

Economics Bulletin, 2003, vol. 4, issue 20, 1-9

Abstract: This paper investigates the quality implications of an upper limit on product prices in a vertically differentiated duopoly. It is shown that a price ceiling diminishes the incentives for strategic product differentiation, thereby improving average quality in the market.

JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2003-04-18
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Citations: View citations in EconPapers (2)

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