Most food products can be classified as credence goods, and regulations exist to provide consumers with a substitute for the lacking information and trust. Rather than having no regulation in place, producers of high-quality goods are better off when a compromise is reached that leads to an imperfect regulation. Some of the producers of low-quality goods benefit by cheating under a not fully credible regulation. Even producers of low-quality goods who will never label their products as being of high quality may profit from the introduction of an imperfect regulation.

Public Regulation as a Substitute for Trust in Quality Food Markets: What if the Trust Substitute cannot be Fully Trusted?"

NISTICO', Rosanna;
2004

Abstract

Most food products can be classified as credence goods, and regulations exist to provide consumers with a substitute for the lacking information and trust. Rather than having no regulation in place, producers of high-quality goods are better off when a compromise is reached that leads to an imperfect regulation. Some of the producers of low-quality goods benefit by cheating under a not fully credible regulation. Even producers of low-quality goods who will never label their products as being of high quality may profit from the introduction of an imperfect regulation.
credence goods, ; asymmetric information, ; food markets; public regulations,
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/20.500.11770/158417
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