On MQS regulation, innovation and market coverage

Bacchiega, Emanuele; Lambertini, Luca; Mantovani, Andrea

doi:10.1016/j.econlet.2010.04.001

Cited by 3 publications

(5 citation statements)

References 6 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In this subsection, we examine this type of government intervention. An increase in the cost of creating a certain degree of misperception is captured by an increase in α k in (2).…”

Section: Government Interventionmentioning

confidence: 99%

See 1 more Smart Citation

Misleading advertising and minimum quality standards

Hattori

Higashida

2014

Information Economics and Policy

View full text Add to dashboard Cite

This paper examines the relationship between misinformation about product quality and quality standards, such as minimum quality standards and certification criteria, when products are vertically differentiated in their health/safety aspects. We investigate the welfare effect of regulating misinformation and strengthening MQSs. We find that when the amount of misinformation on both low-and highquality products is small, regulating misinformation on low-quality products reduces welfare, although the strictness of an MQS influences its effect. On the other hand, regulating misinformation on high-quality products always improves welfare. We also find that a stricter MQS can harm welfare. This, in particular, is likely to occur when the difference between the perceived quality of the two types of products is large and when firms generate high degrees of misperceptions. Moreover, we extend the analysis by endogenizing quality investments and demonstrate that regulating misinformation on high-quality products may deteriorate their true quality and, thus, reduce welfare.

show abstract

“…In this subsection, we examine this type of government intervention. An increase in the cost of creating a certain degree of misperception is captured by an increase in α k in (2).…”

Section: Government Interventionmentioning

confidence: 99%

“…1 However, since consumers often respond fervently and rapidly to information on safety and health issues and place too much confidence in it, this trend may result in extreme reactions. 2 Occasionally, they even purchase goods based on information that is not well-grounded.…”

Section: Introductionmentioning

confidence: 99%

Misleading advertising and minimum quality standards

Hattori

Higashida

2014

Information Economics and Policy

View full text Add to dashboard Cite

show abstract

“…Markets are generally either partially covered (Shaked and Sutton, 1982; Ronnen, 1991; Herguera et al. , 2000) or fully covered (Crampes and Hollander, 1995; Ecchia and Lambertini, 1997a; Bacchiega et al. , 2006).…”

Section: Introductionmentioning

confidence: 99%

Equivalence of Competition Mode in a Vertically Differentiated Duopoly With Delegation

Wang

2009

South African J Economics

View full text Add to dashboard Cite

This paper aims to examine the equivalence of competition mode in a vertically differentiated product market with the relative performance delegation. It demonstrates the equivalence of product quality and social welfare in this delegation game, irrespective of modes of product competition. In addition, in a three-stage game of quality-delegation-quantity (or price), it shows that the delegation coefficient is different between high-quality and low-quality firms in an asymmetric vertical differentiated model, and a high-quality firm makes better use of the delegation than a low-quality firm. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 Economic Society of South Africa.

show abstract

“…fixed or variable) (Ronnen, ; Crampes and Hollander, ; Ecchia and Lambertini, ); (ii) the type of competition in the short run (e.g. Bertrand or Cournot) (Ronnen, ; Motta, ; Valletti, ; Jinji and Toshimitsu, ); (iii) the number of firms (Scarpa, ; Pezzino, ); (iv) consumer preferences (Kuhn, ); and (v) the incentive of innovation (Maxwell, ; Garella, ; Bacchiega et al ., ).…”

mentioning

confidence: 97%

“…Innocuous MQS, where the regulated quality is set below the minimum produced quality level, was introduced by Garella () and Bacchiega et al . () in a dynamic context of R&D activity. They show that MQS might reduce the incentive to innovate by the quality‐leading firm, which might reduce welfare.…”

mentioning

confidence: 99%

Strategic Entry Deterrence by Limiting Qualities under Minimum Quality Standards

Lee

Phuyal

2013

Japanese Economic Review

View full text Add to dashboard Cite

We consider a minimum quality standard (MQS) regulation under a vertically differentiated duopoly model where an incumbent may deter entry by limiting qualities, and explicity examine the strategic interaction between entry cost and a limit quality. We show that MQS will increase social welfare in most cases by reducing the incentive of the incumbent to limit quality, but it might render industry entry unprofitable for the entrant, which could induce predation to deter entry.

show abstract

On MQS regulation, innovation and market coverage

Cited by 3 publications

References 6 publications

Misleading advertising and minimum quality standards

Misleading advertising and minimum quality standards

Equivalence of Competition Mode in a Vertically Differentiated Duopoly With Delegation

Strategic Entry Deterrence by Limiting Qualities under Minimum Quality Standards

Contact Info

Product

Resources

About