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Mutual recognition versus national treatment of standards in a classical monopoly or oligopoly

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journal contribution
posted on 21.05.2014 by Huw Edwards
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.

History

School

  • Business and Economics

Department

  • Business

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.

Publisher

© Mohr Siebeck

Version

AM (Accepted Manuscript)

Publication date

2012

Notes

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

ISSN

0932-4569

Language

en

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