Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer - the seller - follows from a nontrivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device,...

Halal certification of financials product may reduce transaction costs for its buyers when it provides a trusted standard for investors that seek to comply with Islamic law. However, we show that in practice it takes considerable amounts of time (20 days ) and money (USD 122,000) to obtain a...

Is the reputation of a firm tradable when the change in ownership is observable? We consider a competitive market in which a share of owners must retire in each period. New owners bid for the firms that are for sale. Customers learn the owner's type, which reflects the quality of the good or...

Consider a two-product firm that decides on the quality of each product. Product quality is unknown to consumers. If the firm sells both products under the same brand name, consumers adjust their beliefs about quality subject to the performance of both products. We show that if the probability...

Who does, and who should initiate costly certification by a third party under asymmetric quality information, the buyer or the seller? Our answer '€" the seller '€" follows from a non-trivial analysis revealing a clear intuition. Buyer-induced certification acts as an inspection device,...

Unter dem Label Trusted Computing Group hat sich ein weltweites Konsortium von Unternehmen der Hard- und Softwareindustrie gebildet, das an einem universellen Standard für sichere Rechnersysteme einschließlich der Datenkommunikation über Internetverbindungen arbeitet. Im Rahmen der...

Die Konzentration im deutschen Lebensmitteleinzelhandel schreitet weiter voran und rückt das Thema Nachfragemacht mehr und mehr in den Fokus wettbewerbspolitischer Diskussionen. Im Gegensatz zur Angebotsmacht liegen gesicherte empirische Erkenntnisse über das Vorhandensein, das Ausmaß und die...

This paper displays a linear demand oligopoly model, in which firms endogenously decide whether to enter the market and whether to specialize on high or low quality products, and then repeatedly interact to sell experience goods. It shows that the intuition that low and rising prices grant...

Under repeated market interaction, reputation and competition may drive out of the market those firms that do not comply with their quality promises. One may thus presume that competitive pressure improves average market quality. This paper shows that the opposite may be true in an endogenous...