Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer …-induced certification acts as an inspection device, seller-induced certification as a signalling device. Seller-induced certification … maximizes the certifier's profit and social welfare. This suggests the general principle that certification is, and should be …

We provide elementary insights into the effectiveness of certification to increase market transparency. In a market … with opaque product quality, sellers use certification as a signaling device, while buyers use it as an inspection device …. This difference alone implies that seller-certification yields more transparency and higher social welfare. Under buyer-certification …

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer …--induced certification acts as an inspection device, whence seller--induced certification acts as a signalling device. Seller …--induced certification maximizes the certifier's profit and social welfare. This suggests the general principle that certification is, and …

We provide elementary insights into the effectiveness of certification to increase market transparency. In a market … with opaque product quality, sellers use certification as a signaling device, while buyers use it as an inspection device …. This difference alone implies that seller-certification yields more transparency and higher social welfare. Under buyer-certification …

In markets with quality unobservable to buyers, third-party certification is often the only instrument to increase … transparency. While both sellers and buyers have a demand for certification, its role differs fundamentally: sellers use it for … signaling, buyers use it for inspection. Seller induced certification leads to more transparency, because it is informative …

We provide elementary insights into the effectiveness of certification to increase market transparency. In a market … with opaque product quality, sellers use certification as a signaling device, while buyers use it as an inspection device …. This difference alone implies that seller-certification yields more transparency and higher social welfare. Under buyer-certification …

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer …-induced certification acts as an inspection device, seller-induced certification as a signalling device. Seller-induced certification … maximizes the certifier's profit and social welfare. This suggests the general principle that certification is, and should be …

We provide elementary insights into the effectiveness of certification to increase market transparency. In a market … with opaque product quality, sellers use certification as a signaling device, while buyers use it as an inspection device …. This difference alone implies that seller-certification yields more transparency and higher social welfare. Under buyer-certification …

In markets with quality unobservable to buyers, third-party certification is often the only instrument to increase … transparency. While both sellers and buyers have a demand for certification, its role differs fundamentally: sellers use it for … signaling, buyers use it for inspection. Seller induced certification leads to more transparency, because it is informative …