How big is the 'lemons' problem? Historical evidence from French wines

Autor: Emmanuel Paroissien, Ariel Ortiz-Bobea, Pierre Mérel
Přispěvatelé: University of California [Davis] (UC Davis), University of California, Cornell University College of Veterinary Medicine, State University of New York (SUNY), Alimentation et sciences sociales (ALISS), Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement (INRAE), ANR-11-LABX-0027,RFIEA+,Réseau français des instituts d'études avancées Plus(2011)
Rok vydání: 2021
Předmět:
Economics and Econometrics
media_common.quotation_subject
05 social sciences
Adverse selection
Welfare
Certification
JEL: N - Economic History/N.N5 - Agriculture
Natural Resources
Environment
and Extractive Industries/N.N5.N54 - Europe: 1913–
[SHS.ECO]Humanities and Social Sciences/Economics and Finance
Product (business)
Information asymmetry
Incentive
Uncertainty quality
JEL: Q - Agricultural and Natural Resource Economics • Environmental and Ecological Economics/Q.Q1 - Agriculture/Q.Q1.Q18 - Agricultural Policy • Food Policy
0502 economics and business
Economics
Perfect competition
Quality (business)
050207 economics
Market value
JEL: D - Microeconomics/D.D8 - Information
Knowledge
and Uncertainty/D.D8.D82 - Asymmetric and Private Information • Mechanism Design
Finance
Industrial organization
050205 econometrics
media_common
Zdroj: European Economic Review
European Economic Review, Elsevier, 2021, 138, 33 p. ⟨10.1016/j.euroecorev.2021.103824⟩
ISSN: 0014-2921
DOI: 10.1016/j.euroecorev.2021.103824
Popis: International audience; This paper provides empirical evidence on the welfare losses associated with asymmetric information about product quality in a competitive market. When consumers cannot observe product characteristics at the time of purchase, atomistic producers have no incentive to supply costly quality. We compare wine prices across administrative districts around the enactment of historic regulations aimed at certifying the quality of more than 250 French appellation wines to identify welfare losses from asymmetric information. We estimate that these losses amount to more than 7% of total market value, suggesting an important role for credible certification schemes.
Databáze: OpenAIRE
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