Abstract
Most food products can be classified as “credence” goods and regulations exist to provide consumers with a substitute for the lacking information and trust. The paper presents an analysis of the decisions of suppliers and consumers about “credence” good in three institutional scenarios, which reflect different levels of credibility of the regulation. The first scenario is a reference scenario in which the regulation is fully credible. In the second case considered there is no regulation, or, if there is, it is totally ineffective. In the third scenario a regulation only partially credible provides consumers with an imperfect substitute for the information and trust they lack. The last section of the paper discusses the possible implications of the results reached in explaining the limited effectiveness of many regulations concerning food quality.
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