ENGLISH

Quality, Sunk Costs and Competition

Book information

Language
english
Format
PDF
Filesize
410 kB (419722 bytes)
Pages
\36
Library
twirpx
Time added
2017-08-07 07:01:42
Языки и языкознание;Английский язык;Тексты и топик

Description

This paper explores the link between quality, cost and concentration. Using concentrationand cost data and product quality indicators for 2,244 products in over eighty industries in 1997and 2002 in the US, a two-stage, ordered probit, random effects estimation explores the impactof concentration and cost on quality. The results demonstrate that overall market concentrationand high fixed costs are both positively correlated with product quality across most industries.Generally, when either industry concentration or industry fixed costs increase, the likelihood of theproduct being higher quality increases and the likelihood of observing a lower quality decreases.Further, the authors confirm that prices are a good signal of product quality. A theoretical modelis also derived. (36 стр. )

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