Diagnostic tests provide valuable information to buyers about credence attributes like food safety and GMO content. Errors in testing, however, can mislead buyers and lead to problems like adverse selection. The ability to segregate suppliers who can deliver safe food from suppliers who cannot...

One of the drivers of green consumerism are social network externalities that are associated with buying 'green' because green consumerism is fashionable, or because of reputation effects. We analyze how the strength of this social network effect impacts green consumerism, environmental...

Most of us need the services of an expert when our apartment's heating or our washing machine breaks down, or when our car starts to make strange noises. And for most of us commissioning an expert to solve the problem causes concern. This concern does not disappear even after repair and payment...

With credence goods consumers cannot judge the quality they receive compared to the quality they need. The needed quality can only be observed by an expert seller who may exploit the information asymmetry by cheating. In recent years various contributions have analyzed the credence goods problem...

Eco-labels are part of a new wave of environmental policy that emphasizes information disclosure as a tool to induce environmentally friendly behavior by both firms and consumers. Little consensus exists as to whether eco-certified products are actually better than their conventional...

The paper inquires whether a public eco-label mitigatesadverse selection, where an ecologically superior (green) product variant is underprovided. A model, integrating entry into a perfectly competitive, vertically differentiated industry and rationally expected quality structure (REQS) under...

There has been a great deal of recent growth in the area of private food quality standards. This article analyses the incentives for setting private quality standards before governments do so. Since food quality standards are generally multifaceted, different types of standards will affect...

We study dynamic markets where product safety is unobserved by consumers. Perfect, but costly, audits and an exogenous noisy signal can provide information regarding seller type. Without the noisy signal, sellers do not disclose product safety without auditing. If audits are too expensive, a...

This paper examines the liability and labeling approaches to regulating product safety. Stronger product liability increases producer care, which then has a negative lulling effect on consumer attention to warning labels. By contrast, more visible warning labels increase such consumer care,...