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Eco-labelling, competition and environment: Endogenization of labelling criteria

Adel Ben Youssef and Rim Lahmandi-Ayed ()

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Abstract: This paper suggests a modelling of the labelling procedure consistent with empirical observations, that allows the endogenous calculation of labelling criteria. The authority in charge of the labelling program chooses the level of labelling criteria so as to maximise the social surplus, anticipating competition between firms in environmental qualities and prices. While accounting simply for the informational role of labels, this model allows to understand observed behavior such as firms' ignorance of a label, resistance, support or indifference of firms to the labelling program and the decision of the authority not to set up a label.

Keywords: Eco-label; Labelling criteria; Environmental quality; Price competition; Firms' position (search for similar items in EconPapers)
Date: 2008-10-01
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Published in Environmental and Resource Economics, Springer, 2008, 41 (2), pp.133-154. 〈10.1007/s10640-007-9184-6〉

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DOI: 10.1007/s10640-007-9184-6

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