Certification of Credence Goods with Consideration of Consumers’ Learning Ability

Table 1

Producer and consumer’ payoff matrix in the two-period signaling model.

			Consumer
			Purchasing	Nonpurchasing
Producer	High-quality products	Certified	2𝑝ℎ−𝑐ℎ−𝑐𝑒,2𝑣ℎ−𝑝ℎ	−𝑐𝑒,0
		Noncertified	2𝑝𝑙−𝑐ℎ,2𝑣ℎ−𝑝ℎ	(0,0)
	Low-quality products	Certified	𝑝ℎ−𝑐𝑙−𝑐𝑒−𝑐𝑡+(1−𝛼)𝑝ℎ−𝑐𝑙,(2−𝛼)𝑣𝑙−𝑝ℎ	−𝑐𝑒−𝑐𝑡,0
		Noncertified	2𝑝𝑙−𝑐𝑙,2𝑣𝑙−𝑝𝑙	(0,0)