Standards vs. labels with imperfect competition and asymmetric information

I demonstrate that providing information about product quality is not necessarily the best way to address asymmetric information problems when markets are imperfectly competitive. In a vertical differentiation model I show that a Minimum Quality Standard, which retains asymmetric information, generates more welfare than a label, which provides full information.

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Year of publication:	2011
Authors:	Baltzer, Kenneth
Publisher:	Copenhagen : University of Copenhagen, Department of Food and Resource Economics (IFRO)
Subject:	minimum quality standard \| label \| asymmetric information \| vertical differentiation \| product quality

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Series:	FOI Working Paper ; 2011/1
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	hdl:10419/204319 [Handle] RePEc:foi:wpaper:2011_1 [RePEc]
Classification:	L13 - Oligopoly and Other Imperfect Markets ; L15 - Information and Product Quality; Standardization and Compatibility ; L51 - Economics of Regulation
Source:	EconStor

Persistent link: https://www.econbiz.de/10012100964