Monopolistic Suppliers Exploit Consumers as Firms Compete on Product Quality
The researchers studied how letting companies that sell different quality products decide things can affect the money they make, customers, and overall public happiness in a chain of connected markets. They discovered that when these companies delegate choices, they can make more profit, but this decreases how happy customers are and how well society is doing as a whole. The kind of competition also plays a role: firms can earn more from suppliers if they sell high-quality products but can also make more profit if they sell low-quality products depending on the competition style.