Market equilibria with endogenous, hierarchical information

Article Abstract:

An examination of a competitive industry characterized by the presence of both a production lag and stochastic demand is undertaken. In this industry, costless endogenous information is observed by all agents, who also observe costly exogenous information. Analysis of the industry's characteristics reveals that market equilibria occurs in general conditions. Further analysis provides insights into several issues, including the transmittal of information from those who are informed to those who are not and the hierarchical and socially optimal nature of equilibrium distribution.

Prices, Rational expectations (Economics), Equilibrium (Economics)

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Asymmetric international minimum quality standards and vertical differentiation

Article Abstract:

The impact of national quality standards on equilibrium prices and quality standard is studied in a model of a vertically differentiated duopoly across two countries. It is assumed that the two country markets are not harmonized with regards price strategy. The model suggests that the market of the country with lesser standards is swayed by the other country's higher quality standards and pricing strategies. It is further suggested that the minimum quality standards serves as a non-tariff barrier to trade.

Economic aspects, Product quality, International aspects, Product differentiation, Vertical integration, Duopolies

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