Using a model of vertical product differentiation, we show under what institutional circumstances welfare gains will be maximized as economies integrate and harmonize labeling and certification policies for credence goods. Specifically, we show that harmonized mandatory, exclusive discrete...

A model of vertical quality differentiation is used to analyze the introduction of continuous and binary labeling in a market for credence goods with process attributes under autarky and free trade. The results indicate that continuous labeling increases welfare under autarky and free trade so...