Trusting Labels: A Matter of Numbers?
Labelling is an increasingly popular way to deal with the problem of non-observability of quality inherent in the consumption of credence goods. I present a model in which the number of labelled products a monopolist offers serves as a signal for the non-observable endogenous quality. An increase in the number of labelled products increases the risk of losing consumer trust by increasing the possibility of detecting wrong labels. This lowers the incentive to produce low quality in the first place.
|Date of creation:||Feb 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 0041 31 631 45 06
Fax: 41 31 631 37 83
Web page: http://www.vwi.unibe.ch/content/publikationen/index_eng.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Uwe Dulleck & Rudolf Kerschbamer, 2001.
"On Doctors, Mechanics and Computer Specialists Or Where are the Problems with Credence Goods?,"
Vienna Economics Papers
0101, University of Vienna, Department of Economics.
- Dulleck, Uwe & Kerschbamer, Rudolf, 2001. "On Doctors, Mechanics and Computer Specialists. Or Where are the Problems with Credence Goods?," CEPR Discussion Papers 3016, C.E.P.R. Discussion Papers.
- Winand Emons, 1994.
"Credence Goods and Fraudulent Experts,"
dp9402, Universitaet Bern, Departement Volkswirtschaft.
- Emons, Winand, 2001.
"Credence goods monopolists,"
International Journal of Industrial Organization,
Elsevier, vol. 19(3-4), pages 375-389, March.
- Emons, Winand, 1997. "Credence Goods Monopolists," Berkeley Olin Program in Law & Economics, Working Paper Series qt9c5508x4, Berkeley Olin Program in Law & Economics.
- Winand Emons, 1995. "Credence Goods Monopolists," Diskussionsschriften dp9501, Universitaet Bern, Departement Volkswirtschaft.
- Shapiro, Carl, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, MIT Press, vol. 98(4), pages 659-79, November.
- Sullivan, Mary, 1990. "Measuring Image Spillovers in Umbrella-Branded Products," The Journal of Business, University of Chicago Press, vol. 63(3), pages 309-29, July.
- Carl Shapiro, 1982. "Consumer Information, Product Quality, and Seller Reputation," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 20-35, Spring.
- Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service.
- Cabral, L.M.B., 2000.
"Stretching Firm and Brand Reputation,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
00-07, New York University, Leonard N. Stern School of Business-.
- Choi, Jay Pil, 1998.
"Brand Extension as Informational Leverage,"
Review of Economic Studies,
Wiley Blackwell, vol. 65(4), pages 655-69, October.
When requesting a correction, please mention this item's handle: RePEc:ube:dpvwib:dp0201. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvia Glusstein-Gerber)
If references are entirely missing, you can add them using this form.