When are Private Standards more Stringent than Public Standards?

44 Pages Posted: 19 Jun 2013

See all articles by Thijs Vandemoortele

Thijs Vandemoortele

LICOS Centre for Institutions and Economic Performance

Koen Deconinck

KU Leuven - Centre for Institutions and Economic Performance (LICOS)

Multiple version iconThere are 2 versions of this paper

Date Written: March 25, 2013

Abstract

Retailers’ private standards are increasingly important in addressing consumer concerns about safety, quality and social and environmental issues. Empirical evidence shows that these private standards are frequently more stringent than their public counterparts. This article develops a political economy model that may contribute to explaining this stylized fact. We show that if producers exercise their political power to persuade the government to impose a lower public standard, retailers may apply their market power to install a private standard at a higher level than the public one, depending on several factors.

Keywords: Private standards, public standards, political economy

JEL Classification: D72, L15

Suggested Citation

Vandemoortele, Thijs and Deconinck, Koen, When are Private Standards more Stringent than Public Standards? (March 25, 2013). Available at SSRN: https://ssrn.com/abstract=2281092 or http://dx.doi.org/10.2139/ssrn.2281092

Thijs Vandemoortele (Contact Author)

LICOS Centre for Institutions and Economic Performance ( email )

Waaistraat 5, bus 3511
Leuven, B-3000
Belgium

HOME PAGE: http://www.econ.kuleuven.be/thijs.vandemoortele

Koen Deconinck

KU Leuven - Centre for Institutions and Economic Performance (LICOS) ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium

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