Chioveanu, Ioana (2009): Price and Quality Competition.
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This study considers an oligopoly model with simultaneous price and quality choice. Ex-ante homogeneous sellers compete by offering products at one of two quality levels. The consumers have heterogeneous tastes for quality: for some consumers it is efficient to buy a high quality product, while for others it is efficient to buy a low quality product. In the symmetric equilibrium firms use mixed strategies that randomize both price and quality, and obtain strictly positive profits. This framework highlights trade-offs which determine the impact of consumer protection policy in the form of quality standards.
|Item Type:||MPRA Paper|
|Original Title:||Price and Quality Competition|
|English Title:||Price and Quality Competition|
|Keywords:||Oligopoly; Price and quality competition; Quality standards|
|Subjects:||L - Industrial Organization > L5 - Regulation and Industrial Policy
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality; Standardization and Compatibility
|Depositing User:||Ioana Chioveanu|
|Date Deposited:||25. Mar 2010 23:42|
|Last Modified:||21. Feb 2013 19:56|
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