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.
机构:
Logistics Research Center, Shanghai Maritime University, Shanghai
School of Management, Fudan University, ShanghaiLogistics Research Center, Shanghai Maritime University, Shanghai
Zhang L.-H.
Wu Z.-T.
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机构:
Logistics Research Center, Shanghai Maritime University, ShanghaiLogistics Research Center, Shanghai Maritime University, Shanghai
Wu Z.-T.
Fan T.-J.
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机构:
School of Business, East China University of Science and Technology, ShanghaiLogistics Research Center, Shanghai Maritime University, Shanghai