Food Credence Goods Market Equilibrium Morphology under Third-party Authentication
WANG Jianhua
LU Xiaobo
BAO Han
Abstract：By classifying consumers into “sensitive” and“unresponsive”, a two-stage dynamic game mod-el is constructed .In stage 1 , high-quality firms decide whether to implement the third-party certification system and set prices .In stage 2, low-quality firms decide whether to camouflage certification and transfer to consumers price signals connected with products ’ quality information .The conditions to realize separa-ting equilibrium of the market under three different circumstances are also discussed :with only“sensitive”consumers , with only “unresponsive” consumers , and with both “sensitive” and“unresponsive” consum-ers.The result reveals that whether or not the high-quality firms use the third-party certification label, the food credence goods market realizes separating equilibrium under certain conditions .In addition, in the market coexistence of “sensitive” and “unresponsive” consumers, when the power of government supervi-sion and punishment is weak , prices of high-quality products are comparatively low , and when the percent-age of“sensitive” consumers is high , low-quality firms tend to have the motivation to be disguised as high-quality firms.
Keywords：third-party certificationmarket equilibriumdynamic gamefood
Publication Date：2016-01-01
Online Publishing Date：2025-08-15(First online date of this platform, not the publication date of the document)
Pages：8( 7-13,29 )