Minimum Quality Standards and Predatory Behaviour

17 Pages Posted: 24 Mar 2000

See all articles by Luca Lambertini

Luca Lambertini

University of Bologna - Department of Economics

Carlo Scarpa

University of Brescia; NERA Economic Consulting

Date Written: November 1999

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 Classification: L12, L13

Suggested Citation

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

Luca Lambertini (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
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)

NERA Economic Consulting ( email )

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White Plains, NY 10606
United States

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