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Minimum Quality Standards and Predatory Behaviour

Luca Lambertini
University of Bologna - Department of Economics

Carlo Scarpa
University of Brescia ; Fondazione Eni Enrico Mattei (FEEM) - Fondazione Eni Enrico Mattei (FEEM), Milan

November 1999

FEEM Working Paper No. 86.99

Abstract:
This paper shows that the introduction of a minimum quality standard can have repercussions on market structure, opening the possibility of predatory behaviour. The predatory equilibrium exists independently of whether or not adjustment costs are present. Moreover, whenever predation is an equilibrium, it is selected by the risk dominance criterion.

Keywords: MQS, vertical differentiation, predatory behaviour

JEL Classifications: L12, L13

Working Paper Series

Date posted: March 24, 2000 ; Last revised: December 05, 2003

Suggested Citation

Lambertini, Luca and Scarpa, Carlo, Minimum Quality Standards and Predatory Behaviour (November 1999). FEEM Working Paper No. 86.99. Available at SSRN: http://ssrn.com/abstract=200550 or doi:10.2139/ssrn.200550

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Contact Information

Luca Lambertini (Contact Author) University of Bologna - Department of Economics ( email ) Strada Maggiore 45 40125 Bologna 40125 Italy +39 051 2092600 (Phone) +39 051 2092664 (Fax)
Carlo Scarpa University of Brescia ( email ) Via San Faustino 74B Dipartimento di Scienze Economiche 25122 Brescia Italy +39+030+2988+833 (Phone) +39+030+2988+839/840 (Fax)
Fondazione Eni Enrico Mattei (FEEM) - Fondazione Eni Enrico Mattei (FEEM), Milan ( email ) Corso Magenta 63 20123 Milan Italy