The value of delegated quality control
This paper studies the case in which a firm delegates quality control to an independent monitor. In a repeated game, consumers’ trust provides incentives to acquire information about whether the good is defective, and withhold defective goods from sale. If third‐party reports are observable to consu...
| Autor principal: | |
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| Formato: | Journal Article |
| Lenguaje: | Inglés |
| Publicado: |
Wiley
2017
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| Acceso en línea: | https://hdl.handle.net/10568/148506 |
| _version_ | 1855523092447625216 |
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| author | Saak, Alexander E. |
| author_browse | Saak, Alexander E. |
| author_facet | Saak, Alexander E. |
| author_sort | Saak, Alexander E. |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | This paper studies the case in which a firm delegates quality control to an independent monitor. In a repeated game, consumers’ trust provides incentives to acquire information about whether the good is defective, and withhold defective goods from sale. If third‐party reports are observable to consumers, delegation lessens the first and dispenses with the second moral hazard concern but also creates agency costs. Internal quality control is optimal only if trades are sufficiently frequent and consumer information is sufficiently precise. This result holds in the presence of the possibility of collusion, fully non‐verifiable presale information, and economies of scale in external quality control. |
| format | Journal Article |
| id | CGSpace148506 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2017 |
| publishDateRange | 2017 |
| publishDateSort | 2017 |
| publisher | Wiley |
| publisherStr | Wiley |
| record_format | dspace |
| spelling | CGSpace1485062024-10-25T07:55:48Z The value of delegated quality control Saak, Alexander E. quality control economic systems This paper studies the case in which a firm delegates quality control to an independent monitor. In a repeated game, consumers’ trust provides incentives to acquire information about whether the good is defective, and withhold defective goods from sale. If third‐party reports are observable to consumers, delegation lessens the first and dispenses with the second moral hazard concern but also creates agency costs. Internal quality control is optimal only if trades are sufficiently frequent and consumer information is sufficiently precise. This result holds in the presence of the possibility of collusion, fully non‐verifiable presale information, and economies of scale in external quality control. 2017 2024-06-21T09:24:53Z 2024-06-21T09:24:53Z Journal Article https://hdl.handle.net/10568/148506 en Wiley Saak, Alexander E. 2017. The value of delegated quality control. The Journal of Industrial Economics 65(2):309-335. https://doi.org/10.1111/joie.12138 |
| spellingShingle | quality control economic systems Saak, Alexander E. The value of delegated quality control |
| title | The value of delegated quality control |
| title_full | The value of delegated quality control |
| title_fullStr | The value of delegated quality control |
| title_full_unstemmed | The value of delegated quality control |
| title_short | The value of delegated quality control |
| title_sort | value of delegated quality control |
| topic | quality control economic systems |
| url | https://hdl.handle.net/10568/148506 |
| work_keys_str_mv | AT saakalexandere thevalueofdelegatedqualitycontrol AT saakalexandere valueofdelegatedqualitycontrol |