Imperfect certification in a Bertrand duopoly

Lucie Bottega et 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;

Codes JEL

  • 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 et Jenny de Freitas, « Imperfect certification in a Bertrand duopoly », Economics Letters, vol. 178, 2019, p. 33–36.

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Publié dans

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