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2017
- handle: 10670/1.dtv13c
- hal: hal-02043024
- doi: 10.1111/jems.12195
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info:eu-repo/semantics/altIdentifier/doi/10.1111/jems.12195
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Quality of environment Social welfare Social work Social service agencies Relief stations (for the poor) Philanthropy Benevolent institutions Social reform Social welfare Reform, Social Government revenue Public revenue Public welfare--Government policy Welfare (Public assistance) Social welfare Poor relief Public welfare reform Relief (Aid) Welfare reform Public assistance Benevolent institutions Public relief Public charities Commercial products--Prices Commodity prices Price theory Justum pretium Price labels Labeling Labelling Grade labeling Social welfare Philanthropy Human welfare Shoppers Customers (Consumers) Institutions, Charitable and philanthropic Social welfare Endowed charities Charitable institutions Poor relief Alms and almsgiving Relief (Aid) Philanthropy Benevolent institutions Private nonprofit social work Charities--Societies, etcCiter ce document
Philippe Mahenc, « Honest versus misleading certification », HAL-SHS : économie et finance, ID : 10.1111/jems.12195
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Résumé
This paper questions the honesty of third-party certification in the market for a good whose environmental quality is not observable by consumers. The certifier maximizes a weighted sum of its own revenue and social welfare. The higher the relative weight placed on revenue, the stronger the certifier’s incentive to mislead consumers. Certification is analyzed as a costly signaling mechanism that, besides displaying labels, transmits information through market prices. Honest certification requires that prices credibly signal environmental quality to prevent cheating. I show that certification can only be honest when the certifier is driven more by social welfare than by profit. In the reverse case, the certifier cannot help jamming the price signal, thereby granting unreliable labels.