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Quality Choice, Sales Restriction And The Mode Of Competition

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  • NICOLAS BOCCARD
  • XAVIER WAUTHY

Abstract

A regulator imposing sales restrictions or capacity limitation on firms competing in oligopolistic markets may enhance quality provision by these firms. The instrument amounts to protecting entrants or low‐quality firms; this in turn makes it profitable to sink money into quality upgrades. Moreover, for most restrictions levels, the impact on quality selection is invariant to the mode of competition.

Suggested Citation

  • Nicolas Boccard & Xavier Wauthy, 2006. "Quality Choice, Sales Restriction And The Mode Of Competition," Manchester School, University of Manchester, vol. 74(1), pages 64-84, January.
    • Handle: RePEc:bla:manchs:v:74:y:2006:i:1:p:64-84
    DOI: 10.1111/j.1467-9957.2006.00483.x
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    References listed on IDEAS

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    1. Tasneem Chipty & Ann Dryden Witte, 1997. "An Empirical Investigation of Firms' Responses to Minimum Standards Regulations," NBER Working Papers 6104, National Bureau of Economic Research, Inc.
    2. Tanga McDaniel & Karsten Neuhoff, 2002. "Auctions to gas transmission access: The British experience," Working Papers EP06, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
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    Cited by:

    1. Eaton, Derek, 2015. "Innovation and IPRs for Agricultural Crop Varieties as Intermediate Goods," 2015 Conference, August 9-14, 2015, Milan, Italy 211581, International Association of Agricultural Economists.
    2. Boccard Nicolas & Wauthy Xavier Y., 2010. "Ensuring Quality Provision through Capacity Regulation under Price Competition," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-27, October.
    3. Derek Eaton, 2013. "Innovation and IPRs in the Agricultural Seed Sector," CIES Research Paper series 19-2013, Centre for International Environmental Studies, The Graduate Institute.
    4. Eaton, Derek, 2014. "A model of IPRs in the international supply chain of seeds and agricultural production," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182643, European Association of Agricultural Economists.
    5. Jean J. Gabszewicz & Marco A. Marini & Skerdilajda Zanaj, 2017. "Random Encounters and Information Diffusion about Markets," DEM Discussion Paper Series 17-24, Department of Economics at the University of Luxembourg.

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