This paper deals with the consequences of setting a label, on both firms?' price strategies in the case of credence goods. We demonstrate that the high quality firm may be better off in the absence of label.Classification JEL : D82, L15

While the economics literature generally agrees that imperfectly competitive firms do not make socially optimal quality choice, there is considerable controversy about the social impact of Minimum Quality Standard (mqs). In this survey, we show that the existence of a second firm is a necessary...