Vertical Differentiation and Credence Goods: Harmonized Labeling and Gains from International Integration

Ian Sheldon and Brian Roe

No 6340, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Using a model of vertical product differentiation, we show under what institutional circumstances welfare gains will be maximized as economies integrate and harmonize labeling and certification policies for credence goods. Specifically, we show that harmonized mandatory, exclusive discrete labeling will not maximize the gains from economic integration, i.e., the choice of labeling regime can have a negative effect on market structure if firms choose to exit, reducing the range and quality of goods in the integrated market.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 30
Date: 2008
New Economics Papers: this item is included in nep-com and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6340

DOI: 10.22004/ag.econ.6340

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