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A NOTE ON QUALITY, MARKET STRUCTURE AND THE IMPORTANCE OF THE ‘INTEGER CONSTRAINT’
Author(s) -
Manna Manfredi M. A.
Publication year - 1987
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.1987.tb00249.x
Subject(s) - oligopoly , constraint (computer aided design) , integer (computer science) , quality (philosophy) , microeconomics , product (mathematics) , economics , mathematical economics , industrial organization , mathematical optimization , mathematics , computer science , cournot competition , philosophy , geometry , epistemology , programming language
Faced with the integer constraint brought about by quality‐related fixed costs, a socially‐managed industry is more flexible than a free‐entry oligopoly, for it can adjust the integer‐constrained number of firms either upwards or downwards. As a result, and contrary to conventional wisdom, product quality may be identical under the two regimes.