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| Author: | Lutz, S. Lyon, T. P. Maxwell, J. W. |
| Title: | Quality leadership when regulatory standards are forthcoming? |
| Journal: | Journal of Industrial Economics
2000 : SEP, VOL. 48:3, p. 331-348 |
| Index terms: | LEADERSHIP PRODUCT DIFFERENTIATION QUALITY REGULATIONS STANDARDS |
| Language: | eng |
| Abstract: | In many markets, governments set minimum quality standards while some sellers compete on the basis of quality by exceeding them. Such quality leadership strategies often win public acclaim, especially when they involve environmental attributes. Using a duopoly model of vertical product differentiation, the authors show that if the high-quality firm can commit to a quality level before regulations are promulgated, it induces the regulator to weaken standards, and welfare falls. |
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