How Big is the “Lemons” Problem? Historical Evidence from French Wines

Pierre Mérel (), Ariel Ortiz-Bobea and Emmanuel Paroissien

No 308045, 2021 Allied Social Sciences Association (ASSA) Annual Meeting (Virtual), January 3-5, 2021, San Diego, California from Agricultural and Applied Economics Association

Abstract: This paper provides empirical evidence on the welfare losses associated with asymmetric information about product quality in a competitive market. When consumers cannot observe product characteristics at the time of purchase, atomistic producers have no incentive to supply costly quality. We compare wine prices across administrative districts around the enactment of historic regulations aimed at certifying the quality of more than 250 French appellation wines to identify welfare losses from asymmetric information. We estimate that these losses amount to more than 7% of total market value, suggesting an important role for credible certification schemes.

Keywords: Institutional and Behavioral Economics; Marketing (search for similar items in EconPapers)
Pages: 61
Date: 2021-01
New Economics Papers: this item is included in nep-agr, nep-com, nep-his and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://ageconsearch.umn.edu/record/308045/files/B ... %202021%20Merged.pdf (application/pdf)

Related works:
Journal Article: How big is the “lemons” problem? Historical evidence from French wines (2021)
Working Paper: How big is the “lemons” problem? Historical evidence from French wines (2021)
Working Paper: How Big is the “Lemons” Problem? Historical Evidence from French Wines (2020)
Working Paper: How Big is the “Lemons” Problem? Historical Evidence from French Wines (2020)
Working Paper: How Big is the “Lemons” Problem? Historical Evidence from French Wines (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:assa21:308045

DOI: 10.22004/ag.econ.308045

Access Statistics for this paper

More papers in 2021 Allied Social Sciences Association (ASSA) Annual Meeting (Virtual), January 3-5, 2021, San Diego, California from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().