Labelling by a for-Profit Certifier

Ibrahima Barry (), Olivier Bonroy () and Paolo Garella

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: We analyze a for-profit certifier’s eco-labelling policies in industries where firms have some “countervailing power”. We show that the certification standard for an environmental quality is lowered when firms bargain over the certification fee. This result is explained by the firms obtaining a positive profit when they do not adopt the label (an outside option). Without “countervailing power” the certifier would be able to extract the whole surplus from the labeling firm and would set a higher standard for the environmental quality. Taxes and subsidies aimed to increase the latter also affect the fee and the standard; the final effect of these policies may be shown to be reversed by the “countervailing power”.

Keywords: Labels; private certification; public certification; tax; subsidy (search for similar items in EconPapers)
JEL-codes: L13 L15 L5 (search for similar items in EconPapers)
Date: 2014-06-04, Revised 2016-02-27
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://wp.demm.unimi.it/files/wp/2014/DEMM-2014_07wp.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2014-07

Access Statistics for this paper

More papers in Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano Via Conservatorio 7, I-20122 Milan - Italy. Contact information at EDIRC.
Bibliographic data for series maintained by DEMM Working Papers ( this e-mail address is bad, please contact ).