Template-Type: ReDIF-Paper 1.0

Author-Name: Stefan Napel
Author-X-Name-First: Stefan
Author-X-Name-Last: Napel

Author-Name: Gunnar Oldehaver
Author-X-Name-First: Gunnar
Author-X-Name-Last: Oldehaver

Title: A Dynamic Perspective on Minimum Quality Standards under Cournot Competition   
	
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.
Length:  35 pages
Creation-Date:  2009-09
File-URL: http://www.bgpe.de/texte/DP/082_napel.pdf
File-Format: Application/pdf
File-Function: First version, 2009
Number: 082
Classification-JEL: L41, L51, L15, D43
Keywords: Minimal quality standard, Cournot competition, collusion
Handle: RePEc:bav:wpaper:082_napel