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Bottega, Lucie
and De Freitas, Jenny
(2019)
Imperfect certification in a Bertrand duopoly.
Economics Letters, 178.
pp. 33-36.
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Official URL : http://tse-fr.eu/pub/123561
Identification Number : 10.1016/j.econlet.2019.02.014
Abstract
A label that imperfectly signals product quality is analyzed in a Bertrand duopoly with differentiated products. Considering strategic firms when certification is imperfect has some important implications. A separating equilibrium can be sustained with a free test due to price strategic complementarity. When the certifier’s objective is welfare, and the test cost is sufficiently small, the most appropriate test is that which is subject to a low rate of false negatives.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | 2019 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Asymmetric informationQuality certificationImperfect testLabelingBertrand duopolySeparating equilibrium |
| JEL Classification: | C72 - Noncooperative Games D43 - Oligopoly and Other Forms of Market Imperfection D60 - General D82 - Asymmetric and Private Information L15 - Information and Product Quality; Standardization and Compatibility |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 26 Sep 2019 09:33 |
| Last Modified: | 27 Oct 2021 13:37 |
| OAI Identifier: | oai:tse-fr.eu:123561 |
| URI: | https://publications.ut-capitole.fr/id/eprint/32786 |
