Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279383 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10632
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We model competition on a credence market governed by an imperfect label, signaling high quality, as a rank-order tournament between firms. In this market interaction, asymmetric firms jointly and competitively control the underlying quality ranking's precision by releasing individual information. While the labels and the information they are based on can be seen as a public good guiding the consumers' purchasing decisions, individual firms have incentives to strategically amplify or counteract the competitors' information emission, thereby manipulating the label's (or ranking's) discriminatory power. Elements of the introduced theory are applicable to several (credence-good) industries which employ labels or rankings, including academic departments, books, music, and investment opportunities.
Subjects: 
labelling
credence goods
contests
product differentiation
JEL: 
C70
d700
H40
M30
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.