Imperfect certification in a Bertrand duopoly

Lucie Bottega, and Jenny de Freitas


A label that imperfectly signals product quality is analyzed in a Bertrand duopoly with differentiated products. Considering strategic firms when certification is imperfect has some important implications. A separating equilibrium can be sustained with a free test due to price strategic complementarity. When the certifier’s objective is welfare, and the test cost is sufficiently small, the most appropriate test is that which is subject to a low rate of false negatives.


Asymmetric informationQuality certificationImperfect testLabelingBertrand duopolySeparating equilibrium;

JEL codes

  • C72: Noncooperative Games
  • D43: Oligopoly and Other Forms of Market Imperfection
  • D60: General
  • D82: Asymmetric and Private Information • Mechanism Design
  • L15: Information and Product Quality • Standardization and Compatibility


Lucie Bottega, and Jenny de Freitas, Imperfect certification in a Bertrand duopoly, Economics Letters, vol. 178, 2019, pp. 33–36.

See also

Published in

Economics Letters, vol. 178, 2019, pp. 33–36