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Vertical product differentiation and credence goods: Mandatory labeling and gains from international integration

Author

Listed:
  • Ian Sheldon
  • Brian Roe

    () (The Ohio State University)

Abstract

A traves de un modelo vertical de diferenciacion de productos se muestra el marco institucional que maximiza el bienestar cuando dos economias se integran comercialmente y coordinan sus politicas de etiquetado y certificacion. En particular, se muestra que el etiquetado discreto, armonizado y obligatorio no maximiza ganancias. Por ejemplo, la eleccion del tipo de etiquetado puede tener un efecto negativo sobre la estructura de mercado si las empresas deciden salirse, reduciendo asi el rango y la calidad de los bienes. Pero con reconocimiento mutuo de estandares de etiquetado existe una probabilidad mas alta de ganancia.

Suggested Citation

  • Ian Sheldon & Brian Roe, 2008. "Vertical product differentiation and credence goods: Mandatory labeling and gains from international integration," EconoQuantum, Revista de Economia y Negocios, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 5(1), pages 9-33, Julio - D.
  • Handle: RePEc:qua:journl:v:5:y:2008:i:1:p:9-33
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    File URL: http://econoquantum.cucea.udg.mx/volumen_5_num_1/vol_5_no_1_art_1.pdf
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    References listed on IDEAS

    as
    1. Scarpa, Carlo, 1998. "Minimum quality standards with more than two firms1," International Journal of Industrial Organization, Elsevier, vol. 16(5), pages 665-676, September.
    2. Boom, Anette, 1995. "Asymmetric International Minimum Quality Standards and Vertical Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 101-119, March.
    3. H. Lutz, Stefan, 2000. "Trade Effects of Minimum Quality Standards with and without Deterred Entry," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 15, pages 314-344.
    4. Brian Roe & Ian Sheldon, 2007. "Credence Good Labeling: The Efficiency and Distributional Implications of Several Policy Approaches," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1020-1033.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Vertical differentiation; credence goods; labeling; economic Integration.;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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