文档介绍：Price and petition ? Ioana Chioveanu y University College London February 2010 Abstract This study considers an oligopoly model with simultaneous price and quality choice. Ex- ante homogeneous pete by o¤ering products at one of two quality levels. The consumers have heterogeneous tastes for quality: for some consumers it is e￠ cient to buy a high quality product, while for others it is e￠ cient to buy a low quality product. In the symmetric equilibrium ?rms use mixed strategies that randomize both price and quality, and obtain strictly positive pro?ts. This framework highlights trade-o¤s which determine the impact of consumer protection policy in the form of quality standards. Keywords:Oligopoly; Price and petition; Quality standards JEL classi?cation:L13; L15; L50 1 Introduction Di¤erences in the quality of groceries or household supplies sometimes stem from packaging or labelling, availability of information, or expert/celebrity endorsements. Some products indicate an improved recipe, added vitamin C, are labelled as healthy living options, or are endorsed by celebrities/experts. Such quality improvements most often do not call for a long term decision. Firms can relatively frequently change the packaging, slightly improve a recipe or arrange for an endorsement, and rivals are unlikely to observe the internal price-quality decision before making their own choices. Furthermore, in these markets consumers are likely to di¤er in their willingness to pay for quality. Building on these observations, this study proposes an oligopoly model where sellers pete in quality and price. More speci?cally, this analysis shows that in the symmetric equilibrium of the price-petition model, the ?rms randomize on both prices and qualities. In this setting, price and quality dispersion emerges petition of ex-ante identical sellers in the provision of a homogeneous product. Some important features of this model are the following. Sellers can choose between two levels of quality. All c