Quality and location choices under price regulation
Autor(a) principal: | |
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Data de Publicação: | 2006 |
Outros Autores: | , |
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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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 |
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1799132475285307392 |