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Fair Trade: In or Out the Market?

Sylvaine Poret () and Claire Chambolle ()

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Abstract: This paper focuses on a sustainable perspective of Fair Trade concept. We propose a simple model to provide some theoretical arguments in the debate about the sale of Fair Trade labelled goods in the large-scale distribution. The main hypothesis is related to the observation that some consumers are willing to pay a premium for Fair Trade products. We show that Fair Trade products are more likely to be on retailer's shelves if the Fair Trade certifier's objective is to maximize quantities labelled rather than the price paid to producers. We also underline that the key variable in the retailer's choice to sell the Fair Trade product is not the percentage of consumers who are willing to pay a Fair Trade good, but how much the Fair Trade likers are willing to pay for it.

Keywords: Différentiation des produits; Discrimination en prix; Revente; Product differentiation; Retailing; Price discrimination (search for similar items in EconPapers)
Date: 2007
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Handle: RePEc:hal:wpaper:hal-00243062