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| McCluskey, Jill J.; Loureiro, Maria L.. |
| This paper analyzes a monopolist's behavior when consumers cannot observe the production standards. These types of products are usually known as credence goods. The steady-state level of quality with credence goods is found to be lower than that with experience goods, and perfect information goods. The finding that only perceived quality, which is effectively a filtered version of true quality, affects reputation indicates rewards for high quality production are lower in the credence good case. Further, an increase in the level of monitoring can increase the true level of product quality in the market for credence goods. |
| Tipo: Journal Article |
Palavras-chave: Credence goods; Production standards; Reputation; Production Economics. |
| Ano: 2005 |
URL: http://purl.umn.edu/30788 |
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| McCluskey, Jill J.. |
| Demand for healthy, safe, and environmentally friendly food products has been increasing. In response, producers are marketing organic and other quality-differentiated foods, sometimes claiming to have followed sound environmental and animal welfare practices. These products frequently have unobservable quality attributes. If the profitmaximizing producer is able to deceive the consumer with a false claim, then he or she will enjoy a higher price with lower production costs (compared to the full disclosure outcome). The analysis described in this paper shows that repeat-purchase relationships and third-party monitoring are required for high-quality credence goods to be available. Policy implications of this analysis for national organic food standards are... |
| Tipo: Presentation |
Palavras-chave: Credence goods; Organic foods.; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; L15; Q13. |
| Ano: 1999 |
URL: http://purl.umn.edu/123706 |
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