Download This PaperMinimum Quality Standards in Hedonic Markets with Environmental Externalities
Quaderni DSE Working Paper No. 731
11 Pages Posted: 9 Mar 2011
Date Written: February 4, 2011
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.
Keywords: MQS, environmental externality, product quality
JEL Classification: L13, L51, Q50
Suggested Citation: Suggested Citation
Ecchia, Giulio and Lambertini, Luca and Tampieri, Alessandro, Minimum Quality Standards in Hedonic Markets with Environmental Externalities (February 4, 2011). Quaderni DSE Working Paper No. 731, Available at SSRN: https://ssrn.com/abstract=1780997 or http://dx.doi.org/10.2139/ssrn.1780997
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