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Will geographical indications supply excessive quality?

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  • Pierre Mérel
  • Richard J. Sexton

Abstract

This study investigates the choice of quality by producer organisations (POs) in charge of defining product specifications for geographical indications. The model assumes that the PO chooses the quality level that maximises joint producer profits in anticipation of the competitive equilibrium that arises once quality is set. Using a fairly general variant of the vertical differentiation model and a flexible specification of production costs, we show that the PO has an incentive to supply quality in excess of the socially optimal level. , Oxford University Press.

Suggested Citation

  • Pierre Mérel & Richard J. Sexton, 2012. "Will geographical indications supply excessive quality?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 39(4), pages 567-587, September.
    • Handle: RePEc:oup:erevae:v:39:y:2012:i:4:p:567-587
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    File URL: http://hdl.handle.net/10.1093/erae/jbr056
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