On the Regulation of a Vertically Differentiated Market

Lambertini, Luca; Mosca, Manuela

doi:10.1111/1467-8454.00062

Cited by 11 publications

(9 citation statements)

References 16 publications

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“…5. The closest instrument to an emission tax analyzed in the literature is the quality taxation/ subsidization scheme studied by Lambertini and Mosca (1999) under the assumption of zero externalities from quality.…”

Section: Discussionmentioning

confidence: 99%

Optimal Tax Policy under Environmental Quality Competition

Lombardini-Riipinen

2005

Environ Resource Econ

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This paper studies the socially optimal emission and commodity tax policy when consumers are willing to pay a price-premium for environmentally friendlier variants of a commodity vertically differentiated in environmental quality. The first-best levels of quality can be obtained by a combination of a uniform ad valorem tax and an emission tax (or a subsidy for buying green products). The first-best emission tax is higher than the social valuation of the positive externality associated with average environmental quality. Regardless of environmentally conscious consumers, if only one instrument is available, the second-best emission tax is equal to the social valuation of the positive externality associated with average environmental quality. A uniform ad valorem tax increases welfare only if the social valuation of the positive externality associated with average environmental quality is low enough. Copyright Springer 2005ad valorem taxes, emission taxes, environmental quality, imperfect competition, subsidies, vertical differentiation, D62, H21, L13,

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Section: Discussionmentioning

confidence: 99%

Optimal Tax Policy under Environmental Quality Competition

Lombardini-Riipinen

2005

Environ Resource Econ

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“…Instead, they induce the monopolist to mitigate the excess differentiation typical of a centralized regime, by shifting passengers from the slow to the fast lane, as long as s > f . The logic of this tax is similar, for instance, to that of the tax on quality in Lambertini and Mosca (1999), and Cremer and Thisse (1994) in the context of a vertically differentiated oligopoly, as long as in our model congestion is interpreted as a quality level.…”

Section: Centralized Regimementioning

confidence: 84%

Congestion and Incentives in the Age of Driverless Cars

2020

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Fleets of ridesharing companies, such as Uber and Lyft, are providing an increasing share of passenger travel. Autonomous vehicles will likely only magnify this trend. We analyze the welfare effects of the transition from a decentralized regime, in which travelers are atomistic and do not internalize the congestion externality, to a centralized regime, where travelers are supplied by a monopolist's fleet. The monopolist can sort travelers across routes based on their congestion disutility, and ration them. A centralized regime is always welfare-reducing when the monopolist chooses not to ration travelers. We then characterize optimal road taxes throughout the transition.

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“…In view of the sparse body of literature, Lambertini (2006) concludes that horizon-tal and vertical product differentiation are usually studied in isolation. However, since…”

Section: Related Literaturementioning

confidence: 99%

Markets with technological progress: pricing, quality, and novelty

Auer

Trede

2017

J. Econ.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractNew and old products differ in two respects: quality and newness. Whereas a higher quality of a new product always benefits consumers, the newness itself benefits some consumers, but not others, and for some, it is even a disadvantage. We capture these features in a Hotelling model of OverLapping Innovators (HOLI model), entailing a sequence of static Hotelling games of horizontal product differentiation (newness), that we extend by vertical product differentiation (quality). In this model, the firms compete on quality and price. Using advanced dynamic hedonic regression methods, we empirically investigate the pricing policy of firms in the German laser printer market.We show that their pricing corresponds to our model with the seller of the new product acting as the Stackelberg follower.

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On the Regulation of a Vertically Differentiated Market

Cited by 11 publications

References 16 publications

Optimal Tax Policy under Environmental Quality Competition

Optimal Tax Policy under Environmental Quality Competition

Congestion and Incentives in the Age of Driverless Cars

Markets with technological progress: pricing, quality, and novelty

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