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How to Promote Quality Perception in Wine Markets: Brand Advertising or Geographical Indication?

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Author Info
Chengyan Yue
Stephan Marette
John C. Beghin

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Abstract

In the context of the wine industry, we investigate producers' choice between geographical indications and brand advertising to convey information to consumers. Producers also decide whether or not to select an effort level for improving the quality of their products. We show that if this effort level is selected, a producer will prefer to rely on brand advertising for promoting its products and setting up its own reputation. Despite allowing the cost of promotion to be shared, a geographical indication does not sufficiently reward the effort to improve quality. Finally, the selection of both instruments by producers is examined.

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Publisher Info
Paper provided by Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University in its series Food and Agricultural Policy Research Institute (FAPRI) Publications with number 06-wp426.

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Date of creation: Aug 2006
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Handle: RePEc:ias:fpaper:06-wp426

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Related research
Keywords: brand advertising; effort; geographical indication; GI; quality; wine. JEL Classification: L15; L66; Q13;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Philippe Mahenc, 2004. "Influence of Informed Buyers in Markets Susceptible to the Lemons Problem," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 86(3), pages 649-659, 08. [Downloadable!] (restricted)
  2. Marette, Stephan & Zago, Angelo, 2003. "Advertising, Collective Action, And Labeling In The European Wine Markets," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(03), November. [Downloadable!]
  3. Stéphan Marette & John Crespi, 2003. "Can Quality Certification Lead to Stable Cartels?," Review of Industrial Organization, Springer, vol. 23(1), pages 43-64, August. [Downloadable!] (restricted)
  4. Jason A. Winfree & Jill J. McCluskey, 2005. "Collective Reputation and Quality," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(1), pages 206-213, 02. [Downloadable!] (restricted)
    Other versions:
  5. Marco Costanigro & Jill J. McCluskey & Ron C. Mittelhammer, 2007. "Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products," Journal of Agricultural Economics, Blackwell Publishing, vol. 58(3), pages 454-466, 09. [Downloadable!] (restricted)
  6. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August. [Downloadable!] (restricted)
  7. Fluet, Claude & Garella, Paolo G., 2002. "Advertising and prices as signals of quality in a regime of price rivalry," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 907-930, September. [Downloadable!] (restricted)
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  8. Marette, Stephan & Crespi, John M & Schiavina, Allesandra, 1999. "The Role of Common Labelling in a Context of Asymmetric Information," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 167-78, June.
  9. Bodo Steiner, 2004. "French Wines on the Decline? Econometric Evidence from Britain," Journal of Agricultural Economics, Blackwell Publishing, vol. 55(2), pages 267-288. [Downloadable!] (restricted)
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