Quality Certification Standards in Competitive Markets: When Consumers and Producers (Dis)Agree

Harvey Lapan and GianCarlo Moschini

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: A quality certification standard in a competitive setting can improve welfare but may affect consumers and producers differently. In a competitive model with quality preferences of the vertical product differentiation type, we find that producers prefer a higher (lower) quality standard than consumers if individual demand functions are log-convex (log-concave).

Keywords: Comparative statics; log-concavity; minimum quality standards; quality certification; vertical product differentiation (search for similar items in EconPapers)
JEL-codes: D40 (search for similar items in EconPapers)
Date: 2009-03-12
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Citations: View citations in EconPapers (1)

Published in Economics Letters, September 2009, vol. 104 no. 3, pp. 144-147

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Journal Article: Quality certification standards in competitive markets: When consumers and producers (dis)agree (2009)
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