论文信息 - THE PRICE‐QUALITY RELATIONSHIP UNDER MONOPOLY AND COMPETITION

THE PRICE‐QUALITY RELATIONSHIP UNDER MONOPOLY AND COMPETITION

Screening and signalling models have both been used to analyze the price-quality relationship. Both types of model have their shortcomings. An alternative approach is presented which involves endogenizing the quality control process. Firms voluntarily provide a warranty contract for their products and this, in turn, generates an incentive to control quality. Monopolistic and competitive markets are compared in respect of warranties, quality control, and the price-quality relationship. Copyright 1996 by Scottish Economic Society.

Donald A. R. George

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