Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/233239 
Year of Publication: 
2007
Series/Report no.: 
Discussion paper No. 23
Publisher: 
Aboa Centre for Economics (ACE), Turku
Abstract: 
Imposing a minimum quality standard (MQS) is conventionally regarded as harmful if firms compete in quantities. This, however, ignores dynamic effects. We show that an MQS can hinder collusion, resulting in dynamic welfare gains that reduce and may even outweigh the usual static losses. Verdicts on MQS thus depend even more on the market at hand than has been acknowledged.
Subjects: 
minimal quality standard
Cournot competition
collusion
JEL: 
L41
L51
L15
D43
Document Type: 
Working Paper

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