Optimal quality certification

Research output: Contribution to journalArticlepeer-review

Abstract / Description of output

Quality certification not only informs consumers but also stimulates producers to supply better-quality products. We study a problem of quality certification in a moral hazard setting. We show that, under standard assumptions, simple certification systems, such as quality assurance and pass-fail rules, are optimal. Our solution method involves interpreting the certification problem as a delegation problem.
Original languageEnglish
Pages (from-to)161-176
Number of pages17
JournalAmerican Economic Review: Insights
Volume2
Issue number2
DOIs
Publication statusPublished - 1 Jun 2020

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