Working Paper Number
WP #09024, November 2009 revised June 2010; Old working paper #13126
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.
Published in European Review of Agricultural Economics, Vol. 39 no. 4 (September 2012): 539-566.
D23, D82, L14, L15, Q1
This version: June 2010 (First draft: November 2009)
Menapace, Luisa and Moschini, GianCarlo, "Quality certification by geographical indications, trademarks and firm reputation" (2010). Economics Working Papers (2002–2016). 149.