The Market Suffocation Hypothesis — a working instrument

Quality upgrading is optional until the low-quality market closes. Then it becomes the rational choice.

Raise the premium, run the training, hand out the tests — and quality still may not transform across a market. The variable the standard programme diagnostic leaves out is the one that can decide it: can a producer still sell non-compliant product at a competitive price? Move that lever below and watch a rational producer switch from staying low to upgrading — with the premium held constant.

STAY LOWthe same producer, the same premium

The one lever: how open is the low-quality market? (θ)

Everything else is held fixed and stated below. This is the only thing you move.

closed (0)fully open (1)

Now try the standard fix instead — raise the premium and leave the sink open:

Sell low-quality (ΠL)

—

Attempt high-quality (ΠH)

—

Sink must close below

—

Held fixed: verification pass rate π = 0.70, low-quality margin (PL−CL) = 40, compliance cost CH = 95 (index units, illustrative — not measured). Upgrading is rational when ΠH > ΠL, i.e. π(PH−CH) + (1−π−θ)(PL−CL) > 0.  PH high-quality price · CH compliance cost · PL low-quality price · CL baseline cost · θ sink access.

or run the full diagnostic — two gates, five questions
Gate 1 · The signal
1Detection 2Price gap
Gate 2 · The sink
3Access (θ) 4Mechanism 5Enforcement
Reading
✓Verdict

Worked cases — read against the gates

reading record + falsifier