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Could Bad Certifiers Certify Best?

29 Pages Posted: 12 Nov 2016 Last revised: 15 Jul 2017

Jacopo Bizzotto

University of Oslo - Department of Economics

Jesper Rüdiger

University of Copenhagen - Department of Economics

Adrien Vigier

University of Oxford - Department of Economics

Date Written: January 1, 2017

Abstract

We study product certification in settings where the certifier maximizes social welfare and bases his decisions on a mixture of information, some of which is voluntarily disclosed by the sellers, and some of which he acquires first hand by testing products. We show that unless the certifier is able to pre-commit to a testing strategy, then having better access to information may lead to worse certification quality, by crowding out information disclosed by the sellers. Policy implications are discussed.

Keywords: Certification, Product Testing, Information Acquisition, Information Disclosure

JEL Classification: C72, D82, D83, G24, G28

Suggested Citation

Bizzotto, Jacopo and Rüdiger, Jesper and Vigier, Adrien, Could Bad Certifiers Certify Best? (January 1, 2017). Available at SSRN: https://ssrn.com/abstract=2868042 or http://dx.doi.org/10.2139/ssrn.2868042

Jacopo Bizzotto

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

Jesper Rüdiger (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark

Adrien Vigier

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

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