Quality certification by geographical indications, trademarks and firm reputation

We develop a reputation model to study the concurrent use of trademarks and certification for food products with a geographical indication (GI). The model extends Shapiros (1983) approach to modelling reputation to a situation in which two technologies for the production of quality are available, one of which is available only in the GI region. In this setting, trademarks capture firm-specific reputations, whereas GI certification captures a notion of collective reputation. The model shows that GI certification improves the ability of reputation to operate as a mechanism for assuring quality linked to some inherent attributes of a particular production area.