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Pleasures of Cockaigne: Quality Gaps, Market Structure, and the Amount of Grading
Author(s) -
Hollander Abraham,
MonierDilhan Sylvette,
Ossard Hervé
Publication year - 1999
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1244010
Subject(s) - grading (engineering) , business , industrial organization , market share , quality (philosophy) , marketing , engineering , philosophy , civil engineering , epistemology
The article explores under what circumstances high‐quality producers would not voluntarily submit to grading when low‐quality firms would readily do so and under what conditions high‐quality firms would have a lesser proportion of their output graded than would their low‐quality counterparts. It also investigates how market structure affects the decison to grade, establishing that a competitive industry carries out the optimal amount of grading. When some firms have finite market shares, the industry engages in excessive grading.