Quality certification by geographical indications, trademarks and firm reputationEconomics Working Papers (2002–2016)
Document TypeWorking Paper
Working Paper NumberWP #09024, November 2009 revised June 2010; Old working paper #13126
AbstractWe develop a reputation model to study the concurrent use of trademarks and certification for food products with a regional identity, known as geographical indications (GIs). The model extends Shapiro’s (1983) approach to modeling reputation to a situation in which two technologies for the production of quality are available, one of which is available only in the GI region and has a cost advantage for the production of higher quality levels. In this setting, trademarks capture firm-specific reputations whereas GI certification captures a notion of collective reputation. The model shows that GI certification improves the ability of reputation to operate as a mechanism for assuring quality when it is linked to some inherent attributes of a particular production area. We discuss some welfare implications of introducing GI certification and show that an EU-style sui generis GI certification is preferable to the US-style approach based on certification marks.
File FunctionThis version: June 2010 (First draft: November 2009)
Citation InformationLuisa Menapace and GianCarlo Moschini. "Quality certification by geographical indications, trademarks and firm reputation" (2010)
Available at: http://works.bepress.com/giancarlo-moschini/60/