Quality certification under Uncertanity; An analysis of Wine Competition Ratings

Wine competitions serve as certifiers of quality by awarding medals that influence consumer choice and producer strategies. Yet current rating protocols generate uncertainty from two sources: rating risk, due to variation in jury assignments and score aggregation within competitions, and competition risk, arising from inconsistent standards across events. We propose a standardized rating system that addresses rating risk by normalizing judges' scores and grouping wines into statistically significant quality c lasses. Using data from a wine competition, we show that this method reduces score variance and stabilizes award allocations. Extending the analysis, we use a model of intermediary certifiers t o capture competition risk and show that heterogeneity in rating protocols diminishes the informational value of medals, raising consumer search costs and lowering producer profits. Standardization across competitions strengthens the credibility of ratings, improves welfare, and enables more efficient submission strategies for producers.