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The Cambridge Handbook of Technical Standardization Law from PART V - Trademarks, Certification and Standards
Published online by Cambridge University Press: 04 September 2019
Private certification intermediaries reduce the costs of trade by assessing the quality of firms’ products or processes and, in many cases, establishing a standard for making those quality assessments. That cost reduction occurs whenever certification intermediaries mitigate information asymmetries that would otherwise distort trade or block trade entirely. The result is a clear efficiency gain: a repeat-play intermediary supplies its reputational capital and evaluation expertise to sellers who cannot make credible commitments to, or buyers who cannot make independent evaluations of, product quality at a comparable cost.
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