Intermediation Can Replace Certification
Paolo Garella () and
Journal of Economics & Management Strategy, 2000, vol. 9, issue 1, 1-24
We consider a market in which consumers do not have perfect information about product quality. Producers can perfectly reveal that a good is of high quality through certification, which entails socially wasteful costs. Firms can choose whether to sell through an intermediary or to sell independently (vertical integration). We show that multibrand retailing, which leads to a redistribution of profits but not to social costs, can fully or partially replace certification by signaling product quality. Renting the image of a competing high‐quality brand is shown to be an outcome that can be sustained through intermediation.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed
Downloads: (external link)
Working Paper: - INTERMEDIATION CAN REPLACE CERTIFICATION (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:jemstr:v:9:y:2000:i:1:p:1-24
Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1
Access Statistics for this article
More articles in Journal of Economics & Management Strategy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().