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Quality Certification by Geographical Indications, Trademarks and Firm Reputation

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  • Menapace, Luisa
  • Moschini, GianCarlo

Abstract

We develop a reputation model to study the concurrent use of trademarks and certification for food products with a regional identity, known as geographical indications (GIs). The model extends Shapiro’s (1983) approach to modeling reputation to a situation in which two technologies for the production of quality are available, one of which is available only in the GI region and has a cost advantage for the production of higher quality levels. In this setting, trademarks capture firm-specific reputations whereas GI certification captures a notion of collective reputation. The model shows that GI certification improves the ability of reputation to operate as a mechanism for assuring quality when it is linked to some inherent attributes of a particular production area. We discuss some welfare implications of introducing GI certification and show that an EU-style sui generis GI certification is preferable to the US-style approach based on certification marks.

Suggested Citation

  • Menapace, Luisa & Moschini, GianCarlo, 2009. "Quality Certification by Geographical Indications, Trademarks and Firm Reputation," Staff General Research Papers Archive 13126, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:13126
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    References listed on IDEAS

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    1. Bramley, Cerkia & Kirsten, Johann F., 2007. "Exploring the Economic Rationale for Protecting Geographical Indicators in Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(1), March.
    2. GianCarlo Moschini, 2003. "Intellectual Property Rights and the World Trade Organization: Retrospect and Prospects," Center for Agricultural and Rural Development (CARD) Publications 03-wp334, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    4. Daniel Pick, 2008. "Geographical Indications and the Competitive Provision of Quality in Agricultural Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 794-812.
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    9. Bar-Isaac, Heski & Tadelis, Steven, 2008. "Seller Reputation," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(4), pages 273-351, August.
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    Cited by:

    1. Marion Desquilbet & Sylvette Monier-Dilhan, 2015. "Are geographical indications a worthy quality label? A framework with endogenous quality choice," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 42(1), pages 129-150.
    2. Teuber, Ramona, 2011. "Protecting Geographical Indications: Lessons learned from the Economic Literature," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116081, European Association of Agricultural Economists.
    3. Pradyot Ranjan Jena & Chuthaporn Ngokkuen & Dil Bahadur Rahut & Ulrike Grote, 2015. "Geographical indication protection and rural livelihoods: insights from India and Thailand," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 29(1), pages 174-185, May.
    4. repec:gbl:wpaper:2013-01 is not listed on IDEAS
    5. Arita, Shawn & Mitchell, Lorraine & Beckman, Jayson, 2015. "Estimating the Effects of Selected Sanitary and Phytosanitary Measures and Technical Barriers to Trade on U.S.-EU Agricultural Trade," Economic Research Report 212887, United States Department of Agriculture, Economic Research Service.
    6. Garavaglia, Christian & Mariani, Paolo, 2015. "How Much Do Consumers Value PDO Certifications? Estimates of WTP for PDO Dry-Cured Ham in Italy," 145th Seminar, April 14-15, 2015, Parma, Italy 200376, European Association of Agricultural Economists.
    7. Yu, Jianyu & Bouamra-Mechemache, Zohra & Zago, Angelo, 2016. "What’s in a Name? Information, Heterogeneity, and Quality in a Theory of Nested Names," 149th Seminar, October 27-28, 2016, Rennes, France 244897, European Association of Agricultural Economists.
    8. Nacka, Marina & Georgiev, Nenad & Tuna, Emelj & Hazdievski, Vasko, 2013. "Support in Decision-Making for Protection of Geographical Indications of Macedonian Agro-Food Products," 2013 Conference: Tools for decision support in agriculture and rural development, April 18-19, 2013, Krško, Slovenia 183906, Slovenian Association of Agricultural Economists (DAES).
    9. repec:eee:wdevel:v:98:y:2017:i:c:p:58-67 is not listed on IDEAS
    10. Anna Carbone, 2017. "Food supply chains: coordination governance and other shaping forces," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 5(1), pages 1-23, December.
    11. Fares, M’hand & Raza, Saqlain & Thomas, Alban, 2018. "Is there complementarity between labels and brands? Evidence from small French co-operatives," TSE Working Papers 18-895, Toulouse School of Economics (TSE).
    12. repec:eee:wdevel:v:98:y:2017:i:c:p:1-11 is not listed on IDEAS
    13. repec:spr:jknowl:v:8:y:2017:i:2:d:10.1007_s13132-016-0386-4 is not listed on IDEAS
    14. Costanigro, Marco & Scozzafava, Gabriele & Casini, Leonardo, 2017. "Vertical Differentiation, Perceptions Restructuring, And Wine Choices: The Case Of The Gran Selezione In Chianti Wines," Working Papers 253850, American Association of Wine Economists.
    15. Tauber, Ramona & Anders, Sven M. & Langinier, Corinne, 2011. "The Economics of Geographical Indications: Welfare Implications," Working Papers 103262, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
    16. Deselnicu, Oana C. & Costanigro, Marco & Souza-Monteiro, Diogo M. & McFadden, Dawn Thilmany, 2013. "A Meta-Analysis of Geographical Indication Food Valuation Studies: What Drives the Premium for Origin-Based Labels?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(2), August.
    17. Zakaria Sorgho & Bruno Larue, 2014. "Geographical indication regulation and intra-trade in the European Union," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 1-12, November.
    18. Barnes, Ryan N. & Bosworth, Ryan C. & Bailey, DeeVon & Curtis, Kynda R., 2014. "Connecting Sensory Quality Characteristics and Local Designations to Willingness to Pay for Cheese at the Retail Level," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 17(3).
    19. Cuffaro, Nadia & Di Giacinto, Marina, 2015. "Credence goods, consumers’ trust in regulation and high quality exports," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 2, August.

    More about this item

    Keywords

    asymmetric information; certification; geographical indications; reputation; quality; trademarks.;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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