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Stéphan Marette
''Consumer confusion and multiple equilibria ''
( 2010, Vol. 30 No.2 )
This paper focuses on consumer confusion when firms may choose between credible and non-credible certification systems for signalling quality. It is shown that the presence of confused consumers leads to the emergence of multiple stable equilibria, in which either all firms select the credible certification or all firms select the non-credible certification. A situation with numerous confused consumers is characterized by the complete absence of credible certification.
Keywords: Quality, certification
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Sep 01 2009 Manuscript Accepted : May 03 2010

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