Chioveanu, I.;
(2010)
Price and quality competition.
(ELSE Working Papers
373).
ESRC Centre for Economic Learning and Social Evolution: London, UK.
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Abstract
This study considers an oligopoly model with simultaneous price and quality choice. Exante homogeneous sellers compete by offering products at one of two quality levels. The consumers have heterogeneous tastes for quality: for some consumers it is efficient to buy a high quality product, while for others it is efficient to buy a low quality product. In the symmetric equilibrium �firms use mixed strategies that randomize both price and quality, and obtain strictly positive pro�ts. This framework highlights trade-offs which determine the impact of consumer protection policy in the form of quality standards.
| Type: | Working / discussion paper |
|---|---|
| Title: | Price and quality competition |
| Open access status: | An open access version is available from UCL Discovery |
| Publisher version: | http://else.econ.ucl.ac.uk/newweb/papers.php#2010 |
| Language: | English |
| Keywords: | Oligopoly, price and quality competition, quality standards |
| UCL classification: | UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/19479 |
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