Quality competition under price regulation

• Main Authors: Szu-Jieh Wang, 王思捷
• Other Authors: Gong, Jyh-Chyi
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/94171745871403479285

碩士 === 國立臺北大學 === 財政學系 === 102 === Abstract This thesis explores the determinants of equilibrium quality provision in a single stage quality duopoly game, which combines both horizontal and vertical product differentiation with given price and location. In contrast with the simple cost function specification in the literature, we find that it is the cost substitutability (complementarity) between quality and marginal production cost that causes the strategic complements (substitutes) between the quality variables, which in turn affects the comparative statics results. More specifically, in either Cournot or Stackelberg quality competition, high degree of altruism, higher own regulated price, and lower transportation costs will increase firm’s own equilibrium quality. Yet the above results may be reversed if there are strategic substitutes between the quality variables.