Can Competition Reduce Quality?
Autor(a) principal: | |
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Data de Publicação: | 2018 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | https://hdl.handle.net/1822/65675 |
Resumo: | We analyze the effect of competition on quality provision in spatial markets where providers compete in both price and quality (e.g., health care, long-term care, child care, education). By making two key assumptions about the providers in such markets, namely that they are (partly) motivated and have decreasing marginal utility of income, we find, contrary to the existing literature, an unambiguously negative relationship between competition intensity and quality provision. This relationship holds regardless of whether quality and price decisions are made simultaneously or sequentially. However, even if competition reduces quality, it does not necessarily follow that social welfare is reduced. |
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Can Competition Reduce Quality?Quality and price competitionMotivated providersDecreasing marginal utility of incomeSocial SciencesWe analyze the effect of competition on quality provision in spatial markets where providers compete in both price and quality (e.g., health care, long-term care, child care, education). By making two key assumptions about the providers in such markets, namely that they are (partly) motivated and have decreasing marginal utility of income, we find, contrary to the existing literature, an unambiguously negative relationship between competition intensity and quality provision. This relationship holds regardless of whether quality and price decisions are made simultaneously or sequentially. However, even if competition reduces quality, it does not necessarily follow that social welfare is reduced.- The paper has benefited from comments and suggestions by Biung-Ghi Ju and two reviewers. Odd Rune Straume acknowledges the financial support provided by the European Regional Development Fund (ERDF) through the Operational Program Factors of Competitiveness (COMPETE); and by national funds received through the Portuguese Foundation for Science and Technology (FCT) under the research grant PEst-C/EGE/UI3182/2013.Mohr SiebeckUniversidade do MinhoBrekke, Kurt R.Siciliani, LuigiStraume, Odd Rune20182018-01-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/1822/65675engBrekke, K. R., Siciliani, L., & Straume, O. R. (2018). Can Competition Reduce Quality?. Journal of Institutional and Theoretical Economics (JITE), 174(3), 421-447.0932-45691614-055910.1628/093245617X15010500333985https://www.mohrsiebeck.com/artikel/can-competition-reduce-quality-101628093245617x15010500333985info: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:RCAAP2023-07-21T12:39:10Zoai:repositorium.sdum.uminho.pt:1822/65675Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T19:35:44.081518Repositório 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 |
Can Competition Reduce Quality? |
title |
Can Competition Reduce Quality? |
spellingShingle |
Can Competition Reduce Quality? Brekke, Kurt R. Quality and price competition Motivated providers Decreasing marginal utility of income Social Sciences |
title_short |
Can Competition Reduce Quality? |
title_full |
Can Competition Reduce Quality? |
title_fullStr |
Can Competition Reduce Quality? |
title_full_unstemmed |
Can Competition Reduce Quality? |
title_sort |
Can Competition Reduce Quality? |
author |
Brekke, Kurt R. |
author_facet |
Brekke, Kurt R. Siciliani, Luigi Straume, Odd Rune |
author_role |
author |
author2 |
Siciliani, Luigi 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. Siciliani, Luigi Straume, Odd Rune |
dc.subject.por.fl_str_mv |
Quality and price competition Motivated providers Decreasing marginal utility of income Social Sciences |
topic |
Quality and price competition Motivated providers Decreasing marginal utility of income Social Sciences |
description |
We analyze the effect of competition on quality provision in spatial markets where providers compete in both price and quality (e.g., health care, long-term care, child care, education). By making two key assumptions about the providers in such markets, namely that they are (partly) motivated and have decreasing marginal utility of income, we find, contrary to the existing literature, an unambiguously negative relationship between competition intensity and quality provision. This relationship holds regardless of whether quality and price decisions are made simultaneously or sequentially. However, even if competition reduces quality, it does not necessarily follow that social welfare is reduced. |
publishDate |
2018 |
dc.date.none.fl_str_mv |
2018 2018-01-01T00:00:00Z |
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 |
https://hdl.handle.net/1822/65675 |
url |
https://hdl.handle.net/1822/65675 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Brekke, K. R., Siciliani, L., & Straume, O. R. (2018). Can Competition Reduce Quality?. Journal of Institutional and Theoretical Economics (JITE), 174(3), 421-447. 0932-4569 1614-0559 10.1628/093245617X15010500333985 https://www.mohrsiebeck.com/artikel/can-competition-reduce-quality-101628093245617x15010500333985 |
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 |
Mohr Siebeck |
publisher.none.fl_str_mv |
Mohr Siebeck |
dc.source.none.fl_str_mv |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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