We investigate the impact of self-organized reputation versus certification by an independent institution on demand for …

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 …

inefficient. Certification intermediaries are institutions that provide information about quality to buyers. The amount of …

convince consumers of the high quality of its products. Alternatively, a firm can rely on external certification of the quality … external certification. We also show that the potential to signal quality is improved if consumers condition their beliefs on … the source of information, namely whether information comes from external certification or from random detection. …

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 …

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 …