The Governance Policy Choice Of Industry Collective Reputation Degradation:the Comparison Of Minimum Quality Standards And Certification

With the rapid development of China's economy,our country turns to advocate the "spirit of the craftsman" and "precision manufacturing",pay more attention to improving the quality of products,product quality upgrade becomes an important direction of industrial upgrading.But there is a serious problem of fake and shoddy for the current China's products market,these low-quality products adversely affect the collective reputation of the industry.The collective reputation industry is facing a serious problem of information asymmetry,which will lead to adverse selection and moral hazard.In addition there are generally "free rider" problem in collective reputation industry,it will cause the deterioration of industry collective reputation if we do not solve these problems,it will inhibit the motivation to make high quality products.Solve the information asymmetry problem and "free rider" problem is related to whether the business can smoothly upgrade product quality,which has important practical significance.Based on the system analysis on related literature,we analyze the connotation of industry collective reputation and the reasons for the deterioration,and the roles of certification and minimum quality standards play in solving the problem of information asymmetry.Then by using two stage game model,under the background of collective reputation we contrast analysis the effect and the difference between the certification and the minimum quality standards in improving the quality of the products,the collective industry reputation and social welfare.There are many types of consumers in the market,so this article analyses when there are two types consumer on the market such as high-end and low-end consumer,changes in consumer type ratio will affect the balance of product quality and social welfare.Although the certification and the minimum quality standards are two kinds of effective means to solve the problem of asymmetric information and the "free-rider" problem,but high quality and low quality products are allowed at the same time under the certification,while minimum quality standards strictly limited only those meet minimum quality standards can be found in the market.These two kinds of means make consumers and producers have different product quality choices,so when the market consumer type ratio changes,the minimum quality standards certification and regulation will have different governance effects.Finally,based on the conclusions of the study,the paper gives some policy recommendations on how to choose the appropriate regulatory measures and develop appropriate quality standards to improve product quality and social welfare.