Reference

Luisa Menapace (University of Trento), Quality Certification by Geographical Indications,Trademarks and Firm Reputation, Agricultural and Food Industrial Organization Seminar, Toulouse : TSE, January 10, 2011, 11:00–12:30, room MF 323.

Abstract

We develop a reputation model to study the concurrent use of trademarks and certification for food products with a regional identity, known as geographical indications (GIs). The model extends Shapiro’s (1983) approach to modeling reputation to a situation in which two technologies for the production of quality are available, one of which is available only in the GI region and has a cost advantage for the production of higher quality levels. In this setting, trademarks capture firmspecific reputations whereas GI certification captures a notion of collective reputation. The model shows that GI certification improves the ability of reputation to operate as a mechanism for assuring quality when it is linked to some inherent attributes of a particular production area. We discuss some welfare implications of introducing GI certification and show that an EU-style sui generis GI certification is preferable to the US-style approach based on certification marks.