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   Attribute dependence and the provision of quality; Irmen, Andreas  in Regional Science and Urban Economics (2001), 31(5), 547-569 A quality improvement often necessitates modifications of varietal product features. This paper studies firms’ incentives to provide quality when this decision affects the goods’ degree of horizontal ... [more ▼] A quality improvement often necessitates modifications of varietal product features. This paper studies firms’ incentives to provide quality when this decision affects the goods’ degree of horizontal differentiation. Intuitively, one is inclined to argue that private incentives to provide quality are insufficient relative to the social optimum if a quality improvement reduces horizontal differentiation. We find that this argument depends on whether the game is simultaneous or sequential. In the former case private incentives prove excessive relative to the social optimum, and in the latter case, insufficient. As a result, a regulator might want to impose either minimum or maximum quality standards.<P>(This abstract was borrowed from another version of this item.) [less ▲] Detailed reference viewed: 131 (1 UL)On the incentives to provide fuel-efficient automobiles; Irmen, Andreas in Journal of Economics (2001), 73(2), 149-165 We argue that the provision of more fuel-efficient cars necessitates specific aerodynamic shapes. We show that the presence of this technological constraint may reduce the incentives to provide fuel ... [more ▼] We argue that the provision of more fuel-efficient cars necessitates specific aerodynamic shapes. We show that the presence of this technological constraint may reduce the incentives to provide fuel efficiency. In equilibrium, cars become more similar and aerodynamic as fuel prices increase. However, the provided level of fuel efficiency falls short of the social optimal one such that a fuel-economy standard is welfare-enhancing.<P>(This abstract was borrowed from another version of this item.) [less ▲] Detailed reference viewed: 113 (1 UL) |
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