Bernard, Christophe, Calmette, Marie-Françoise, Kilkenny, Maureen, Loustalan, Catherine and Pechoux, Isabelle (2018) Quality in open markets: the sumo conjecture. Revue économique, vol. 69 (n° 2). pp. 197-224.

This is the latest version of this item.

[thumbnail of wp_tse_505.pdf]
Preview
Text
Download (376kB) | Preview

Abstract

We show how a large country’s entrance on world markets can lead to lower and less quality diversity available to consumers rather than more. In our model, autarky quality is directly proportional to the willingness to pay for quality and home market size, and inversely proportional to the cost of quality. We formalize strategically interacting firms, and identify the context in which a low-quality producer can lead, driving high-quality producers out of the market despite the existence of customers willing to pay for higher quality. We discuss the feasibility of this ‘predatory strategy’ by an emerging country. It is more likely in contexts where the emerging exporter is much larger.

Item Type: Article
Language: English
Date: March 2018
Refereed: Yes
Place of Publication: Paris
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 22 May 2018 09:23
Last Modified: 19 Apr 2024 06:45
OAI Identifier: oai:tse-fr.eu:32479
URI: https://publications.ut-capitole.fr/id/eprint/25856

Available Versions of this Item

View Item

Downloads

Downloads per month over past year