2006–2010

Yardstick Competition and Quality

Reprint No. 2009:19

Author(s): Thomas TangeråsYear: 2009 Title: Journal of Economics & Management Strategy Volume (No.): 18 (2) Pages: 589–613
Online article (restrictions may apply)


This paper explores the consequences for quality of introducing yardstick competition in duopoly when a verifiable quality indicator is available. Yardstick competition can be implemented by amenu of transfers that are linear in the cost differential between the two firms and in quality. Cost- and quality incentives are stronger in larger firms when improvements are highly valued by consumers and firms can significantly influence quality. Expenditures on quality improvement can increase or decrease following the introduction of yardstick competition. The crucial factor is the likelihood ratio of productivity between the two firms, not productivity differences.


Reference:
Tangerås, Thomas (2009), "Yardstick Competition and Quality". Journal of Economics & Management Strategy 18(2), 589–613.

Thomas Tangerås

Contact

Ph: +46 8 665 4526
Mob: +46 70 727 5448
thomas.tangeras@ifn.se

Elgar Companion to

Social Capital and Health

Martin Ljunge okt 2018.jpg

Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

About the book

Events

Seminars organized by IFN

 

To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se