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Quality Certification Standards in Competitive Markets: When Consumers and Producers (Dis)Agree

Author

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  • Lapan, Harvey E.
  • Moschini, GianCarlo

Abstract

A quality certification standard in a competitive setting can improve welfare but may affect consumers and producers differently. In a competitive model with quality preferences of the vertical product differentiation type, we find that producers prefer a higher (lower) quality standard than consumers if individual demand functions are log-convex (log-concave).

Suggested Citation

  • Lapan, Harvey E. & Moschini, GianCarlo, 2009. "Quality Certification Standards in Competitive Markets: When Consumers and Producers (Dis)Agree," Staff General Research Papers Archive 13048, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:13048
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    Cited by:

    1. Olivier Bonroy & Christos Constantatos, 2015. "On the Economics of Labels: How Their Introduction Affects the Functioning of Markets and the Welfare of All Participants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 239-259.
    2. Xin Cai & Dongdong Li & Chaofa Wang, 2024. "Auto parts quality certification and manufacturer regulation: An evolutionary game theory perspective," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(4), pages 2459-2472, June.

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    Keywords

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    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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