Fair Trade Labeling: Inside or Outside Supermarkets?
This article is a theoretical contribution to the debate surrounding the introduction of Fair Trade products into large-scale retail distribution. In the model, a Fair Trade certifier and a traditional producer compete to supply their product to a single retailer, consumers who are Fair Trade likers are willing to pay an "ethical" premium for the Fair Trade product, and the premium depends on the revenue of Fair Trade product producers. The conditions of existence of an equilibrium where the Fair Trade product coexists with the traditional brand product on the retailer's shelves are highlighted. In particular, we show that a Fair Trade certifier implements this equilibrium if his preferences are such that the weight devoted to the price paid to producers is smaller than the weight he grants to the quantities of Fair Trade product sold. We also show that a retailer's decision to sell the Fair Trade product is not based on the percentage of consumers who are willing to pay for it, but on how much the Fair Trade likers are willing to pay.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 5 (2007)
Issue (Month): 1 (November)
|Contact details of provider:|| Web page: http://www.degruyter.com|
|Order Information:||Web: http://www.degruyter.com/view/j/jafio|
When requesting a correction, please mention this item's handle: RePEc:bpj:bjafio:v:5:y:2007:i:1:n:9. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.