Please use this identifier to cite or link to this item: https://hdl.handle.net/1822/65675

TitleCan Competition Reduce Quality?
Author(s)Brekke, Kurt R.
Siciliani, Luigi
Straume, Odd Rune
KeywordsQuality and price competition
Motivated providers
Decreasing marginal utility of income
Issue date2018
PublisherMohr Siebeck
JournalJournal of Institutional and Theoretical Economics
CitationBrekke, K. R., Siciliani, L., & Straume, O. R. (2018). Can Competition Reduce Quality?. Journal of Institutional and Theoretical Economics (JITE), 174(3), 421-447.
Abstract(s)We analyze the effect of competition on quality provision in spatial markets where providers compete in both price and quality (e.g., health care, long-term care, child care, education). By making two key assumptions about the providers in such markets, namely that they are (partly) motivated and have decreasing marginal utility of income, we find, contrary to the existing literature, an unambiguously negative relationship between competition intensity and quality provision. This relationship holds regardless of whether quality and price decisions are made simultaneously or sequentially. However, even if competition reduces quality, it does not necessarily follow that social welfare is reduced.
TypeArticle
URIhttps://hdl.handle.net/1822/65675
DOI10.1628/093245617X15010500333985
ISSN0932-4569
e-ISSN1614-0559
Publisher versionhttps://www.mohrsiebeck.com/artikel/can-competition-reduce-quality-101628093245617x15010500333985
Peer-Reviewedyes
AccessOpen access
Appears in Collections:NIPE - Artigos em Revistas de Circulação Internacional com Arbitragem Científica

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