Liebi, Thomas (February 2002). Trusting Labels: A Matter of Numbers? (Diskussionsschriften 02-01). Bern: Universität Bern Volkswirtschaftliches Institut
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Labelling is an increasingly popular way to deal with the problem of non-observability of quality inherent in the consumption of credence goods. I present a model in which the number of labelled products a monopolist offers serves as a signal for the non-observable endogenous quality. An increase in the number of labelled products increases the risk of losing consumer trust by increasing the possibility of detecting wrong labels. This lowers the incentive to produce low quality in the first place.
Item Type: |
Working Paper |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics 03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Economic Theory |
UniBE Contributor: |
Liebi, Thomas |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
Diskussionsschriften |
Publisher: |
Universität Bern Volkswirtschaftliches Institut |
Language: |
English |
Submitter: |
Aline Lehnherr |
Date Deposited: |
15 Apr 2020 11:55 |
Last Modified: |
05 Dec 2022 15:37 |
JEL Classification: |
L15, D82, M37 |
BORIS DOI: |
10.7892/boris.142430 |
URI: |
https://boris.unibe.ch/id/eprint/142430 |
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