Product Attributes and their Classification

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來自 Technische Universität München (TUM) 的課程

The Economics of Agro-Food Value Chains

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Technische Universität München (TUM)

The Economics of Agro-Food Value Chains

72 個評分

Have a look at our trailer for a brief introduction to this course: https://youtu.be/GADAgxTHjgE In this course, you learn how the agro-food value chain approaches the challenge of constantly improving its competitiveness by producing high quality food and products and also aiming to attain greater sustainability. Some of the topics of this course are: • The notion of quality for food and agricultural products and consumer value. • How to conduct market research in this field. • Labelling, branding and pricing strategies, as-well as innovation in the agro-food sector. • How sustainability can be used as a competitive advantage through corporate social responsibility. • The role and different types of industrial standards. • The different forms of coordination in the chain, in particular with regard to the retailing and distribution sector. This course is taught by a group of international experts from Universities in Italy, Germany, Ireland, Scotland and the Netherlands. Each of them will give you insights into a specific topic related to food quality and the organization of the agro-food value chains.

從本節課中

Module 4: Asymmetric Information about Quality

In Module 4 you will learn about asymmetric information with regard to food quality. In the first lesson of the module we will introduce the concepts of asymmetric information, adverse selection, moral hazard, and market failure. That way you will be able to explain the role of information for the functioning of a market. In the second lesson we will talk about the product attributes and their classification. After the lesson you will be able to classify product attributes based on when consumers are able to assess their true qualities.

Product Attributes and their Classification5:34

與講師見面

Hannes Lang
Research Associate
Technical University of Munich
Luisa Menapace
Professor
Technical University of Munich
Faical Akaichi
Research Economist
Scotland’s Rural College
Francesco Bimbo
Research Economist
Wageningen University
Montserrat Costa-Font
Research Economist
Scotland’s Rural College
Carlo Russo
Associate Professor
University of Cassino and Lazio Meridionale
Chenguang Li
Research Economist
University College Dublin

Welcome back to Module 4 entitled, “Asymmetric Information about Quality”.

My name is “Luisa Menapace” and I am a “Professor for Governance in International

Agribusiness at the Technical University of Munich”.

This module is divided into 2 lessons.

In the first lesson, we have already talked about “Asymmetric Information and Market Failures”.

In this lesson, Lesson 2, we will learn about different product attributes and their classification.

Our learning objective for this lesson is being able to classify product attributes

based on when consumers are able to assess their true qualities.

This means based on the time, for example before or after purchasing a product, when

the asymmetry of information between the consumer and the producer is resolved.

Now, I would like you to think about a situation in which you want to purchase a bottle of wine.

Do you face asymmetric information problems regarding the features of the wine?

Before you continue with this video, I would like you to think about which attributes of

the wine you might be interested in and how to assess them.

In this picture, you see a list of attributes concerning wine that were of interest to my students.

Among others, they mentioned flavor, variety, origin, alcohol content, price, color, organic…

We can distinguish three types of attributes.

First, some of these attributes, like color, can easily be assessed before you purchase the wine.

You can see whether the wine is red or white.

Second, some attributes, like taste, cannot be assessed before purchase, but rather after

purchase, once you have tried the wine.

Third, some attributes, like organic, cannot be directly assessed neither before nor after the purchase.

You rather have to rely on the claim of the producer or on a certification that might be noted on the bottle.

The three types of attributes are called respectively, search, experience and credence attributes.

Their classification dates back to the seventies, but it is still relevant today to understand

asymmetric information problems regarding quality.

Search attributes are attributes that you can fully perceive and assess before purchase,

or before entering a contract or a transaction.

Inspection of the attributes (e.g., size, colour) before purchase provides the needed

information for the buyer for the quality assessment.

With experience attributes, buyers can assess their quality only after purchasing the good by consuming it.

Finally, a consumer is not able to directly ascertain credence attributes.

Even post-consumption, environmental characteristics of a good wine are very hard to assess.

Process-attributes (for example, produced without child labour) are also typically not verifiable by the consumer.

Likewise, attributes with potential long-run health effects are also difficult to ascertain by the consumer.

Note that this classification in search, experience and credence attributes can be used also to classify goods and not just attributes.

In general, goods are characterized by a variety of attributes across these three categories.

Nevertheless, it is often the case that the attributes of interest to a consumer fall predominantly in one category only.

In the case of food and agricultural products, we are often concerned either with experience

attributes (in particular, with their taste) or with credence attributes (in particular,

their production process, their environmental features or their origin).

It might already be clear to you that asymmetric information problems are particularly important

for experience and credence attributes.

In the next module we will discuss market solutions for information problems that apply

to experience attributes (in this case the solutions are based on the concept of firm reputation),

and for credence attributes (in this case the solution concepts are based on certification by a trusted public body, like the government).

With this slide we conclude the second lesson – Product Attributes and their Classification -

of Module 4 on Asymmetric Information about Quality.

Thanks for being with me in this lesson. I will see you in Lesson 1 of Module 5 titled “Labels as a Tool to resolve Market Failures”.

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