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Multiplicity of Eco-Labels, Competition, and the Environment


  • Ben Youssef Adel

    (University of Nice Sophia-Antipolis (GREDEG-CNRS))

  • Abderrazak Chema

    (University of Paris Sud (ADIS))


This article develops a vertical differentiation model to study the competition and environmental effects of multiplicity of eco-labels within a given market. The focus is on the informational content of multiple eco-labels and whether or not they reflect the environmental qualities the labels purport to represent. Two settings are considered. In the first setting, which represents the benchmark, we assume information is complete (consumers know the true environmental qualities of the eco-labeled goods). In the second setting, information is incomplete but consumers use price as a signal for environmental qualities. Our results show that when information is complete, introduction of a second eco-label in a market improves the environmental qualities of eco-labeled goods. When information is incomplete, introduction of a second label leads to a rise in prices and a reduction in the environmental qualities of the goods. The latter setting requires specific regulation whereby information must be revealed by a benevolent social planner.

Suggested Citation

  • Ben Youssef Adel & Abderrazak Chema, 2009. "Multiplicity of Eco-Labels, Competition, and the Environment," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 7(2), pages 1-24, December.
  • Handle: RePEc:bpj:bjafio:v:7:y:2009:i:2:n:7

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    References listed on IDEAS

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    8. Adel Ben Youssef & Rim Lahmandi-Ayed, 2008. "Eco-labelling, Competition and Environment: Endogenization of Labelling Criteria," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(2), pages 133-154, October.
    9. Douadia Bougherara & Gilles Grolleau & Luc Thiébaut, 2005. "Can Labelling Policies Do More Harm Than Good? An Analysis Applied to Environmental Labelling Schemes," European Journal of Law and Economics, Springer, vol. 19(1), pages 5-16, January.
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    Cited by:

    1. Brécard, Dorothée, 2014. "Consumer confusion over the profusion of eco-labels: Lessons from a double differentiation model," Resource and Energy Economics, Elsevier, vol. 37(C), pages 64-84.
    2. Dorothée Brécard, 2017. "Consumer misperception of eco-labels, green market structure and welfare," Journal of Regulatory Economics, Springer, vol. 51(3), pages 340-364, June.
    3. Li, Yuanhao & van 't Veld, Klaas, 2015. "Green, greener, greenest: Eco-label gradation and competition," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 164-176.
    4. Ynte Dam & Janneke Jonge, 2015. "The Positive Side of Negative Labelling," Journal of Consumer Policy, Springer, vol. 38(1), pages 19-38, March.
    5. Sebastian Koos, 2011. "Varieties of Environmental Labelling, Market Structures, and Sustainable Consumption Across Europe: A Comparative Analysis of Organizational and Market Supply Determinants of Environmental-Labelled Go," Journal of Consumer Policy, Springer, vol. 34(1), pages 127-151, March.
    6. Li, Yi, 2016. "Competing eco-labels and product market competition," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235389, Agricultural and Applied Economics Association.
    7. Alexis Gutierrez & Thomas F. Thornton, 2014. "Can Consumers Understand Sustainability through Seafood Eco-Labels? A U.S. and UK Case Study," Sustainability, MDPI, Open Access Journal, vol. 6(11), pages 1-23, November.
    8. Mireille Chiroleu-Assouline, 2016. "Multiple Standards: the Case of the French Building Industry," Policy Papers 2016.08, FAERE - French Association of Environmental and Resource Economists.

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