Document Type

Working Paper

Publication Date

6-8-2010

Working Paper Number

WP #09024, November 2009 revised June 2010; Old working paper #13126

Abstract

We 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.

Publication Status

Published in European Review of Agricultural Economics, Vol. 39 no. 4 (September 2012): 539-566.

JEL Classification

D23, D82, L14, L15, Q1

File Format

application/pdf

Length

35 pages

File Function

This version: June 2010 (First draft: November 2009)

Included in

Economics Commons

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