Spatial Competition in Quality

Abstract The well-studied formalism of Hotelling's classic location paradigm does not apply to the case of good quality, which by its very definition requires that all individuals agree on the ranking of goods; therefore, the notion that goods are differentiated by a 'transportation cost' is inept in vertically differentiated markets. Motivated by this observation, we analyze the determinants of product differentiation in a general equilibrium model of monopolistic competition in good quality. The model features many firms, which each hold the monopoly to produce a unique quality level of an otherwise homogenous good, as well as consumers who are heterogeneous in their valuation for quality. We document that the analogue to the transportation cost in the Hotelling model arises if the marginal cost of production is convex with respect to quality. Firms' optimal prices depend on the latter convexity and on the prices of the competitors that are adjacent in the quality space. For given firm entry, average equilibrium markups are decreasing in the density of quality-competition, but are unaffected by average productivity. Endogenizing firm's entry decision, we demonstrate that the density of competition is increasing in the market size and decreasing in average productivity. Last, we apply these insights to analyze the effect of inter-and intra-industry trade on the toughness of quality-competition, firm entry and welfare. * We would like to than

Diseño de un sistema de ventanilla única para un sistema de gobierno electrónico: un caso en Chile

En este trabajo describimos un método de selección y priorización de procedimientos de servicios gubernamentales que deben ser incorporados en un sistema de ventanilla nica. El método, basado en un modelo de programación entera, también considera la calendarización de la incorporación de los servicios dentro del horizonte de planificación.Sociedad Argentina de Informática e Investigación Operativ

Diseño de un sistema de ventanilla única para un sistema de gobierno electrónico: un caso en Chile

En este trabajo describimos un método de selección y priorización de procedimientos de servicios gubernamentales que deben ser incorporados en un sistema de ventanilla nica. El método, basado en un modelo de programación entera, también considera la calendarización de la incorporación de los servicios dentro del horizonte de planificación.Sociedad Argentina de Informática e Investigación Operativ