Quality Certification through a Registered Designation of Origin: An Analytical Model
Chambolle, Claire
Quality Certification through a Registered Designation of Origin: An Analytical Model - 2003.
7
International competition on the wine market is characterised by a disparity of strategies applied by producers and wine-producing regions. We provide a theoretical analysis of the producers’ choice between the two main brand strategies: a private brand name and a brand carrying a public certification such as the French “Appellation d’Origine Contrôlée” (AOC). We show that the latter can be profitable by comparison with the private brand name strategy. However, such a system can lead to underinvestment in quality that can reduce consumer’s surplus.
Quality Certification through a Registered Designation of Origin: An Analytical Model - 2003.
7
International competition on the wine market is characterised by a disparity of strategies applied by producers and wine-producing regions. We provide a theoretical analysis of the producers’ choice between the two main brand strategies: a private brand name and a brand carrying a public certification such as the French “Appellation d’Origine Contrôlée” (AOC). We show that the latter can be profitable by comparison with the private brand name strategy. However, such a system can lead to underinvestment in quality that can reduce consumer’s surplus.
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