Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73414
Authors: 
Napel, Stefan
Oldehaver, Gunnar
Year of Publication: 
2009
Series/Report no.: 
BGPE Discussion Paper 82
Abstract: 
Imposing a minimum quality standard (MQS) is conventionally regarded as harmful if firms compete in quantities. This, however, ignores its possible dynamic effects. We show that an MQS can hinder collusion, resulting in dynamic welfare gains that reduce and may outweigh the static losses which are caused by regulation's distortive effect on equilibrium qualities. Verdicts on MQS thus depend even more on the market structure 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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