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Public Regulation as a Substitute for Trust in Quality Food Markets: What if the Trust Substitute cannot be Fully Trusted?

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  • Giovanni Anania
  • Rosanna Nisticò

Abstract

Most food products can be classified as credence goods, and regulations exist to provide consumers with a substitute for the lacking information and trust. Rather than having no regulation in place, producers of high-quality goods are better off when a compromise is reached that leads to an imperfect regulation. Some of the producers of low-quality goods benefit by cheating under a not fully credible regulation. Even producers of low-quality goods who will never label their products as being of high quality may profit from the introduction of an imperfect regulation.

Suggested Citation

  • Giovanni Anania & Rosanna Nisticò, 2004. "Public Regulation as a Substitute for Trust in Quality Food Markets: What if the Trust Substitute cannot be Fully Trusted?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(4), pages 681-681, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200412)160:4_681:praasf_2.0.tx_2-i
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    Cited by:

    1. Nadia Cuffaro & Marina Di Giacinto, 2011. "High quality exports and consumers’ trust: a development perspective," Working Papers 2011-04, Universita' di Cassino, Dipartimento di Scienze Economiche.
    2. Zago, Angelo M. & Pick, Daniel H., 2004. "Labeling Policies in Food Markets: Private Incentives, Public Intervention, and Welfare Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Number 1), pages 1-16, April.
    3. Petit, Michel & Ilbert, Helene, 2015. "Geographic Indicators and Rural Development in North Africa Implications for TTIP Negotiations," 145th Seminar, April 14-15, 2015, Parma, Italy 200231, European Association of Agricultural Economists.
    4. Ferrier, Peyton, 2010. "Irradiation as a quarantine treatment," Food Policy, Elsevier, vol. 35(6), pages 548-555, December.
    5. Anders, Sven M. & Souza Monteiro, Diogo M. & Rouviere, Elodie, 2007. "Objectiveness in the Market for Third-Party Certification: Does market structure matter?," 105th Seminar, March 8-10, 2007, Bologna, Italy 7894, European Association of Agricultural Economists.
    6. Arfini, Filippo, 1999. "The value of typical products : the case of Prosciutto di Parma and Parmigiano Reggiano cheese," 67th Seminar, October 28-30, 1999, LeMans, France 241032, European Association of Agricultural Economists.
    7. Christoph Müller & Hansjörg Gaus, 2015. "Consumer Response to Negative Media Information About Certified Organic Food Products," Journal of Consumer Policy, Springer, vol. 38(4), pages 387-409, December.
    8. Hans Pitlik, 2016. "Who Disapproves of TTIP? Multiple Distrust in Companies and Political Institutions," WIFO Working Papers 513, WIFO.
    9. Jianyu Yu & Zohra Bouamra-Mechemache, 2016. "Production standards, competition and vertical relationship," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 43(1), pages 79-111.
    10. Auriol, Emmanuelle & Schilizzi, Steven G.M., 2003. "Quality Signaling through Certification. Theory and an Application to Agricultural Seed Market," IDEI Working Papers 165, Institut d'Économie Industrielle (IDEI), Toulouse.
    11. Chuthaporn Ngokkuen & Ulrike Grote, 2012. "Challenges and opportunities for protecting geographical indications in Thailand," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 19(2), pages 93-123, December.
    12. Wesseler, Justus, 2014. "Biotechnologies and agrifood strategies: opportunities, threats and economic implications," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 0(Issue 3), pages 1-18, December.
    13. repec:gam:jagris:v:8:y:2018:i:1:p:6-:d:124942 is not listed on IDEAS
    14. Markus Leibrecht & Hans Pitlik, 2018. "Is Trust in Companies Rooted in Social Trust, or Regulatory Quality, or Both?," WIFO Working Papers 564, WIFO.
    15. Hobbs, Jill E. & Innes, Brian G. & Uzea, Adrian D. & Zhang, Jing, 2012. "Food Quality Verifications and Consumer Trust," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 135069, Agricultural Economics Society.
    16. Cuffaro, Nadia & Di Giacinto, Marina, 2015. "Credence goods, consumers’ trust in regulation and high quality exports," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 0(Issue 2), pages 1-19, August.
    17. Friederike Albersmeier & Holger Schulze & Achim Spiller, 2009. "Evaluation and reliability of the organic certification system: perceptions by farmers in Latin America," Sustainable Development, John Wiley & Sons, Ltd., vol. 17(5), pages 311-324.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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