On labels, competition and process attributes

International audienceThe demand for products differentiated by process attributes, such as "green" products, has increased. One of the specificities of these goods is that only the seller knows the production process used. Generally such asymmetric information leads to market failure, and market signals such as reputation or advertising are inefficient. In this context, governments may implement public labels in order to inform consumers on the attributes of products. In this paper, the author discusses the effect of labels on markets, in particular on producers' strategies. He concludes that depending on the market configurations, labelling may increase competition