Are geographical indications a worthy quality signal? A framework on Protected Designation of Origin with endogenous quality choice

Marion Desquilbet ()
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Marion Desquilbet: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique
Authors registered in the RePEc Author Service: Sylvette Monier-Dilhan

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Abstract: The paper provides a theoretical framework to analyze the effects of Protected Designation of Origin (PDO) labeling on quality choices and welfare. Our model distinguishes two attributes of goods: gustatory quality, which is a search attribute, and geographical origin, which is a credence attribute. We compare equilibria with no label, "non-binding labeling" (i.e. when no requirement on production methods is binding to get the PDO label) and "binding labeling". We find that the PDO good is not necessarily the high-quality good. When it is, the introduction of non-binding labeling causes a decrease in quality. Restrictions on production methods are warranted to maintain the quality level of the labelable good, but they adversely affect the PDO firm.

Keywords: indication géographique; appellation d'origine contrôlée; différenciation verticale; stratégie des offreurs (search for similar items in EconPapers)
Date: 2008-05-29
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Citations: View citations in EconPapers (2)

Published in 25. Journées de Micréconomie Appliquée, May 2008, Saint-Denis, France. 27 p

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Related works:
Working Paper: Are Geographical Indications a Worthy Quality Signal? A Framework on Protected Designation of Origin with Endogenous Quality Choice (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02285603

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