Competing Environmental Labels

Carolyn Fischer, Thomas P. Lyon

Research output: Contribution to JournalArticleAcademicpeer-review


We study markets in which consumers prefer green products but cannot determine the environmental quality of any given firm's product on their own. A nongovernmental organization (NGO) can establish a voluntary standard and label products that comply with it. Alternatively, industry can create its own standard and label. We compare the stringency of these two types of labels, and study their strategic interaction when they coexist. We find that even with error-free labels, environmental benefits may be smaller with two labels than with the NGO label alone, and we characterize when label competition is more likely to be environmentally beneficial.

Original languageEnglish
Pages (from-to)692-716
Number of pages25
JournalJournal of Economics and Management Strategy
Issue number3
Publication statusPublished - 2014


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