Optimal Certi cation Design

نویسنده

  • Sergei Kovbasyuk
چکیده

This paper analyzes the rating of a product of unknown quality by a certi er who internalizes the buyers' surplus and receives payments from a seller. It shows that contrary to conventional wisdom, a regulation that prohibits contingent payments hinders information revelation and harms social welfare when the contract between seller and certi er is public. If the contract is private (buyers do not observe the payments), contingent payments can lead to rating in ation : high ratings are issued for a wide range of qualities and ratings have limited information value. Mandating at fees then prevents rating in ation and can increase welfare.

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تاریخ انتشار 2010