Standards vs. labels with imperfect competition and asymmetric information
Kenneth Baltzer ()
No 2011/1, IFRO Working Paper from University of Copenhagen, Department of Food and Resource Economics
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 dierentiation model I show that a Minimum Quality Standard, which retains asymmetric information, generates more welfare than a label, which provides full information.
Keywords: minimum quality standard; label; asymmetric information; vertical differentiation; product quality (search for similar items in EconPapers)
JEL-codes: L13 L15 L51 (search for similar items in EconPapers)
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Journal Article: Standards vs. labels with imperfect competition and asymmetric information (2012)
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