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Standards and labels

Author

Listed:
  • Stephan Marette

    (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

Abstract

This paper explores the effects of a standard and/or a label influencing care choice. An effort by the firm may increase the probability of offering safe/high-quality products and a label may also be chosen to provide additional information to consumers. It is shown that, except for a few cases, a safety standard maximizing welfare corrects the safety underinvestment by the firm. The safety standard also changes the label choice compared to the private choice that would be made without any regulation. In particular, the enforcement of a safety standard may lead to the absence of a label or to the emergence of a voluntary/mandatory label.

Suggested Citation

  • Stephan Marette, 2008. "Standards and labels," Post-Print hal-01172859, HAL.
    • Handle: RePEc:hal:journl:hal-01172859
    as

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    References listed on IDEAS

    as
    1. Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-1346, December.
    2. Stéphan Marette, 2007. "Minimum safety standard, consumers’ information and competition," Journal of Regulatory Economics, Springer, vol. 32(3), pages 259-285, December.
    3. Uri Ronnen, 1991. "Minimum Quality Standards, Fixed Costs, and Competition," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 490-504, Winter.
    4. Hackner, Jonas, 2000. "A Note on Price and Quantity Competition in Differentiated Oligopolies," Journal of Economic Theory, Elsevier, vol. 93(2), pages 233-239, August.
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    Cited by:

    1. Frank van Tongeren & John Beghin & Stéphane Marette, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," OECD Food, Agriculture and Fisheries Papers 21, OECD Publishing.
    2. Marette, Stéphan & Messéan, Antoine & Millet, Guy, 2012. "Consumers’ willingness to pay for eco-friendly apples under different labels: Evidences from a lab experiment," Food Policy, Elsevier, vol. 37(2), pages 151-161.
    3. Barry, I. & Bonroy, O. & Garella, P.G., 2015. "On taxes and subsidies with private eco-labeling," Working Papers 2015-09, Grenoble Applied Economics Laboratory (GAEL).

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    More about this item

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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