We investigate the introduction of a minimum quality standard (MQS) in a vertically differentiated duopoly with an environmental externality. We establish that the MQS bites only if the hedonic component of consumer preferences is sufficiently strong. Then, we illustrate an underlying tradeoff between the beneficial effects of quality enhancement on prices and the associated undesirable increase in the environmental externality.
Minimum Quality Standards in Hedonic Markets with Environmental Externalities / Ecchia Giulio; Lambertini Luca ; Tampieri Alessandro. - In: ENVIRONMENTAL MODELING & ASSESSMENT. - ISSN 1420-2026. - STAMPA. - 18:18(2013), pp. 319-323. [10.1007/s10666-012-9345-z]
Minimum Quality Standards in Hedonic Markets with Environmental Externalities
ECCHIA, GIULIO;LAMBERTINI, LUCA;TAMPIERI, ALESSANDRO
2013
Abstract
We investigate the introduction of a minimum quality standard (MQS) in a vertically differentiated duopoly with an environmental externality. We establish that the MQS bites only if the hedonic component of consumer preferences is sufficiently strong. Then, we illustrate an underlying tradeoff between the beneficial effects of quality enhancement on prices and the associated undesirable increase in the environmental externality.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.