Competition vs. quality in an industry with imperfect traceability

Elodie Rouviere () and Raphael Soubeyran

Economics Bulletin, 2011, vol. 31, issue 4, 3052-3067

Abstract: We consider an industry where firms produce goods that have different quality levels but firms cannot differentiate themselves from rivals. In this situation, producing low-quality generates a negative externality on the whole industry. This is particularly true when consumers cannot identify producers. In this article, we show that under a "Laissez Faire" situation free entry is not socially optimal and we argue that the imposition of a Minimum Quality Standard (MQS) may induce firms to enter the market.

Keywords: Entry; Externality; Minimum Quality Standard; Quality. (search for similar items in EconPapers)
JEL-codes: L1 L5 (search for similar items in EconPapers)
Date: 2011-10-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I4-P277.pdf (application/pdf)

Related works:
Working Paper: Competition vs. quality in an industry with imperfect traceability (2011)
Working Paper: COMPETITION VS. QUALITY IN AN INDUSTRY WITH IMPERFECT TRACEABILITY (2010)
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:ebl:ecbull:eb-11-00057

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().