Minimum quality standards as a barrier to innovation

Most models of minimum quality standards do not deal with the dynamic nature of regulation. This note shows that presence of minimum quality standards may reduce firm incentives to innovate, leading to a lower level of social welfare under regulation.

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Innovation, Minimum quality, Regulation

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Language(s):English
AuthorsMaxwell, John W. (Dept of Business Economcs and Public Policy, Kelley School of Business, Indian University, IN, USA)
Publisher:Elsevier Science S.A.
Keywords:Innovation, Minimum quality, Regulation
Last update:1998