Quality and location choices under price regulation

Detalhes bibliográficos
Autor(a) principal: Brekke, Kurt R.
Data de Publicação: 2006
Outros Autores: Nuscheler, Robert, Straume, Odd Rune
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/1822/6856
Resumo: In a model of spatial competition, we analyze the equilibrium outcomes in markets where the product price is exogenous. Using an extended version of the Hotelling model, we assume that firms choose their locations and the quality of the product they supply. We derive the optimal price set by a welfarist regulator. If the regulator can commit to a price prior to the choice of locations, the optimal (second-best) price causes overinvestment in quality and an insufficient degree of horizontal differentiation (compared with the first-best solution) if the transportation cost of consumers is sufficiently high. Under partial commitment, where the regulator is not able to commit prior to location choices, the optimal price induces first-best quality, but horizontal differentiation is inefficiently high.
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spelling Quality and location choices under price regulationL50R30R38L13In a model of spatial competition, we analyze the equilibrium outcomes in markets where the product price is exogenous. Using an extended version of the Hotelling model, we assume that firms choose their locations and the quality of the product they supply. We derive the optimal price set by a welfarist regulator. If the regulator can commit to a price prior to the choice of locations, the optimal (second-best) price causes overinvestment in quality and an insufficient degree of horizontal differentiation (compared with the first-best solution) if the transportation cost of consumers is sufficiently high. Under partial commitment, where the regulator is not able to commit prior to location choices, the optimal price induces first-best quality, but horizontal differentiation is inefficiently high.Blackwell PublishingUniversidade do MinhoBrekke, Kurt R.Nuscheler, RobertStraume, Odd Rune2006-032006-03-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/1822/6856eng"Journal of Economics & Management Strategy". ISSN 1058-6407. 15:1 (Mar. 2006) 207-227.1058-640710.1111/j.1530-9134.2006.00098.xhttps://onlinelibrary.wiley.com/doi/full/10.1111/j.1530-9134.2006.00098.xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-21T12:13:57Zoai:repositorium.sdum.uminho.pt:1822/6856Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T19:06:09.207100Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Quality and location choices under price regulation
title Quality and location choices under price regulation
spellingShingle Quality and location choices under price regulation
Brekke, Kurt R.
L50
R30
R38
L13
title_short Quality and location choices under price regulation
title_full Quality and location choices under price regulation
title_fullStr Quality and location choices under price regulation
title_full_unstemmed Quality and location choices under price regulation
title_sort Quality and location choices under price regulation
author Brekke, Kurt R.
author_facet Brekke, Kurt R.
Nuscheler, Robert
Straume, Odd Rune
author_role author
author2 Nuscheler, Robert
Straume, Odd Rune
author2_role author
author
dc.contributor.none.fl_str_mv Universidade do Minho
dc.contributor.author.fl_str_mv Brekke, Kurt R.
Nuscheler, Robert
Straume, Odd Rune
dc.subject.por.fl_str_mv L50
R30
R38
L13
topic L50
R30
R38
L13
description In a model of spatial competition, we analyze the equilibrium outcomes in markets where the product price is exogenous. Using an extended version of the Hotelling model, we assume that firms choose their locations and the quality of the product they supply. We derive the optimal price set by a welfarist regulator. If the regulator can commit to a price prior to the choice of locations, the optimal (second-best) price causes overinvestment in quality and an insufficient degree of horizontal differentiation (compared with the first-best solution) if the transportation cost of consumers is sufficiently high. Under partial commitment, where the regulator is not able to commit prior to location choices, the optimal price induces first-best quality, but horizontal differentiation is inefficiently high.
publishDate 2006
dc.date.none.fl_str_mv 2006-03
2006-03-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/1822/6856
url http://hdl.handle.net/1822/6856
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv "Journal of Economics & Management Strategy". ISSN 1058-6407. 15:1 (Mar. 2006) 207-227.
1058-6407
10.1111/j.1530-9134.2006.00098.x
https://onlinelibrary.wiley.com/doi/full/10.1111/j.1530-9134.2006.00098.x
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Blackwell Publishing
publisher.none.fl_str_mv Blackwell Publishing
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
repository.mail.fl_str_mv
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