Abstract:

Certain quality attributes of products are often difficult for consumers to identify or verify， leading to confusion between products of different quality levels. By disclosing quality information， product label certification helps consumers make more accurate purchase decisions. From the perspective of the supply chain， the impact of product certification （quality information disclosure） in the end market on supply chain firms and heterogeneous consumers is explored. A sequential game-theoretic model involving supplier（s）， duopoly manufacturers， and heterogeneous consumers is established， while considering different supply chain structures （monopoly supplier vs. competing suppliers） and product cost structures （variable quality cost vs. fixed quality cost）. It is found that for production-oriented products with variable quality costs， when product differentiation and consumers’ willingness to pay are low， product label certification may reduce overall supply chain revenue. In contrast， for design-oriented products with fixed quality costs， product certification always enhances supply chain revenue. The impact of product certification on consumer welfare depends on the specific supply chain structure： when there is a monopoly supplier in the raw materials market， product certification increases consumer welfare； however， when duopoly suppliers compete in the upstream market， product certification decreases consumer welfare. The analysis provides certain managerial insights for implementing product label certification policies in practice.

Key words: quality information disclosure, product certification, supply chain performance, consumer surplus, cost structure