For-profit certifier's eco-labelling is common in industries where firms have some “countervailing power” on sharing gains from labelling. We show that the certification standard for an environmental quality is lowered when firms have strong “power.” A certifier with too low bargaining power will prefer to sell to the best offer rather than bargain. This switch in the selling mechanism also thwarts his incentives in setting the standard. This is consequential for evaluating policies. The dimensions and even signs of welfare changes induced by taxes and subsidies depend upon the mechanism used, and ultimately upon firms’ countervailing power.
Eco-labelling by a for-profit certifier: Countervailing power and its consequences / I. Barry, O. Bonroy, P. Garella. - In: CANADIAN JOURNAL OF ECONOMICS. - ISSN 0008-4085. - 50:4(2017 Nov), pp. 1037-1062.
|Titolo:||Eco-labelling by a for-profit certifier: Countervailing power and its consequences|
GARELLA, PAOLO (Ultimo)
|Parole Chiave:||Product differentiation; commodity taxation; price-competition; quality; certification; markets; economics; monopoly; mergers; policy|
|Settore Scientifico Disciplinare:||Settore SECS-P/01 - Economia Politica|
|Data di pubblicazione:||nov-2017|
|Digital Object Identifier (DOI):||http://dx.doi.org/10.1111/caje.12286|
|Appare nelle tipologie:||01 - Articolo su periodico|