Utilize este identificador para referenciar este registo:
https://hdl.handle.net/1822/7725
Título: | Competition and quality in regulated markets: a differential-game approach |
Autor(es): | Brekke, Kurt R. Cellini, Roberto Siciliani, Luigi Straume, Odd Rune |
Palavras-chave: | Regulated markets Competition Quality |
Data: | 2008 |
Editora: | Universidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE) |
Citação: | "NIPE Working Paper". 8 (2008) 1-37. |
Resumo(s): | We investigate the effect of competition on quality in regulated markets (e.g., health care, higher education, public utilities) taking a differential game approach, in which quality is a stock variable. Using a Hotelling framework, we derive the open-loop solution (providers commit to an optimal investment plan at the initial period) and the closed-loop solution (providers move investments in response to the dynamics of the states). If the marginal provision cost is constant, the open-loop and closed-loop solutions coincide, implying that static models are robust to a dynamic specification. If the marginal provision cost is increasing, investment and quality are lower in the closed-loop solution: in fact, quality drops to the minimum level in steady state, implying that quality competition is effectively eliminated. In this case, static models tend to exaggerate the positive effect of competition on quality. Our results can explain the mixed empirical evidence on competition and quality for regulated markets. |
Tipo: | Documento de trabalho |
URI: | https://hdl.handle.net/1822/7725 |
Acesso: | Acesso aberto |
Aparece nas coleções: | NIPE - Documentos de Trabalho |
Ficheiros deste registo:
Ficheiro | Descrição | Tamanho | Formato | |
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NIPE_WP_8_2008.pdf | Documento principal | 495,38 kB | Adobe PDF | Ver/Abrir |