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Title: Mutual recognition versus national treatment of standards in a classical monopoly or oligopoly
Authors: Edwards, T. Huw
Keywords: Economics
Minimum quality
Product standards
Trade disputes
Issue Date: 2012
Publisher: © Mohr Siebeck
Citation: EDWARDS, T.H., 2012. Mutual recognition versus national treatment of standards in a classical monopoly or oligopoly. Journal of Institutional and Theoretical Economics, 168 (3), pp. 455 - 487.
Abstract: We examine strategic biases in the international regulation of monopolistic or oligopolistic industries, where a minimum vertical quality standard is imposed on a classical monopoly or duopoly, to correct an undersupply of quality. This differs from Hotelling-based studies, where the aim of minimum quality standards is to correct excessive product differentiation. It also allows examination of unbalanced trade, not considered in previous work. Noncooperative regulators tend to overregulate for profit-shifting reasons, though only when producers can vary standards across countries. However, even in this latter case, mutual recognition is only unambiguously welfare-improving when trade is balanced, and it reduces trade flows when quality is taken into account.
Description: This article was published in the Journal of Institutional and Theoretical Economics [© Mohr Siebeck] and the definitive version is available at: http://dx.doi.org/10.1628/093245612802921015
Version: Accepted for publication
DOI: 10.1628/093245612802921015
URI: https://dspace.lboro.ac.uk/2134/14640
Publisher Link: http://dx.doi.org/10.1628/093245612802921015
ISSN: 0932-4569
Appears in Collections:Published Articles (Business)

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