Download This PaperMinimum Quality Standard Under Cournot Competition and Pollution
Quaderni DSE Working Paper No. 749
10 Pages Posted: 20 May 2011
Date Written: May 10, 2011
Abstract
We extend the analysis carried out by Valletti (2000) by considering an environmental externality in a vertically differentiated duopoly where firms compete à la Cournot with fixed costs of quality improvement.
We show that, if the weight of the external effect is high enough, the resulting minimum quality standard is indeed binding.
Keywords: MQS, environmental externality, product quality
JEL Classification: L13, L51, Q50
Suggested Citation: Suggested Citation
Lambertini, Luca and Tampieri, Alessandro, Minimum Quality Standard Under Cournot Competition and Pollution (May 10, 2011). Quaderni DSE Working Paper No. 749, Available at SSRN: https://ssrn.com/abstract=1839344 or http://dx.doi.org/10.2139/ssrn.1839344
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