search query: @author Auriol, E. / total: 4
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| Author: | Auriol, E. |
| Title: | Deregulation and quality |
| Journal: | International Journal of Industrial Organization
1998 : MAR, VOL. 16:2, p. 169-194 |
| Index terms: | Regulations Quality Market structure |
| Language: | eng |
| Abstract: | The paper analyzes, within a static model, the effect of quality concern on optimal market structure. It focuses on cases where industry quality has public-good like features and is not contractible. It is shown that the introduction of competition raises a free-rider problem which depresses quality (the smaller producer free-rides on its competitor investment which as a result underinvests). To encourage the efficient producer to provide quality, the regulator diminishes the market-share of the opportunistic producer and chooses more often a monopoly. However, when quality is verifiable the introduction of competition entails no welfare loss whether the regulator observes total quality outcome or individual contributions. |
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