Click here to download

Regulating quality: a comparison between minimum quality standards and mixed oligopoly
Journal Title: STUDI ECONOMICI  
Author/s: Iacopo Grassi 
Year:  2013 Issue: 109 Language: English 
Pages:  20 Pg. 25-44 FullText PDF:  157 KB
DOI:  10.3280/STE2013-109002
(DOI is like a bar code for intellectual property: to have more infomation:  clicca qui   and here 

This paper compares two possible State interventions in a market where a vertical differentiable good is produced: minimum quality standards (MQS) and mixed competition. In the analysis of MQS I consider an endogenous standard, given by the maximization of the Social Welfare, and the possibility for the firms not to respect such a standard, selling a low quality illegal good. In the study of the mixed oligopoly I concentrate the analysis on sectors where there might be separation between managers (who set the prices maximizing the profit) and employees (who set the quality maximizing the social welfare). The main result is that in these sectors the presence of the public firm allows to increase the Social Welfare with respect to the case when the good is produced by private firms or by a firm regulated with MQS.
Keywords: MQS, mixed oligopoly, quality, regulation, piracy.
Jel Code: L13, L50, H44

  1. Cremer H., Marchand M. and Thisse J.-F. (1989), The public firm as an instrument for regulating an oligopolistic market, Oxford Economic Papers, 41(2): 283-301.
  2. De Fraja G. and Delbono F. (1989), Alternative strategies of a public enterprise in oligopoly, Oxford Economic Papers, 41(2): 302-11.
  3. Delbono F., Denicolò V. and Scarpa C. (1991), Quality choice in a vertically differentiated mixed duopoly Working papers, Dipartimento Scienze Economiche, Università di Bologna.
  4. Ecchia G. and Lambertini L. (1997), Minimum quality standards and collusion, Journal of Industrial Economics, 45(1): 101-113.
  5. Lutz S. and Pezzino M. (2013), Vertically differentiated mixed oligopoly with qualitydependent fixed costs, The Manchester School (forthcoming).
  6. Ma C. and Burgess J. (1993), Quality competition, welfare, and regulation, Journal of Economics, 58(2): 153-173.
  7. Merril W. and Schneider N. (1966), Government firms in oligopoly industries, Quarterly Journal of Economics, 41: 113-131.
  8. Motta M. (1993), Endogenous quality choice: Price vs. quantity competition, Journal of Industrial Economics, 41(2): 113-131.
  9. Peitz M. and Waelbroeck P. (2006), Piracy of digital products: A critical review of the theoretical literature, Information Economics and Policy, 18(4): 449-476.
  10. Ronnen U. (1991), Minimum quality standards, fixed costs, and competition, RAND Journal of Economics, 22(4): 490-504.
  11. Shaked A. and Sutton J. (1982), Relaxing price competition through product differentiation, Review of Economic Studies, 49(1): 3-13.
  12. Spence A.M. (1975), Monopoly, quality, and regulation, Bell Journal of Economics, 6(2): 417-429.
  13. Tirole J. (1988), The Theory of Industrial Organization, vol. 1 of MIT Press Books, The MIT Press.
  14. Valletti T.M. (2000), Minimum quality standards under cournot competition, Journal of Regulatory Economics, 18(3): 235-245.

Iacopo Grassi, in "STUDI ECONOMICI " 109/2013, pp. 25-44, DOI:10.3280/STE2013-109002


FrancoAngeli is a member of Publishers International Linking Association a not for profit orgasnization wich runs the CrossRef service, enabing links to and from online scholarly content