@article{Deaton:22235,
      recid = {22235},
      author = {Deaton, Brady J., Jr. and Hoehn, John P.},
      title = {INFORMATION AS A DOUBLE-EDGE SWORD: IMPLICATIONS FOR FOOD  STANDARDS AND LABELS},
      address = {2003},
      number = {376-2016-20474},
      series = {Selected Paper},
      pages = {23},
      year = {2003},
      abstract = {An analytical model is developed to examine product  quality labeling. Prior to labeling all consumers are  willing to pay a premium for the quality characteristic but  product quality cannot be observed directly. If production  costs are increasing, the total quantity produced may  contain a mix of products - with and without the  high-valued attribute. In the pooled equilibrium demand is  influenced by perceptions of the product mix. After labels  are introduced the market is separated into two sectors,  conventional and high-valued. The economic implications of  labels are examined by contrasting welfare in the  separating equilibrium with welfare in the pooled  equilibrium. Under the models' maintained assumptions the  conventional sector loses welfare, while producers of the  high-valued product experience gains. In addition,  producers of the high-valued product may have incentives to  promote costly labeling despite net-welfare losses.},
      url = {http://ageconsearch.umn.edu/record/22235},
      doi = {https://doi.org/10.22004/ag.econ.22235},
}