Quality Disclosure And Certification In The Motorcycle Industry

This paper studies the practice of quality disclosure and quality certification of sellers and experts in the Italian motorcycle industry between 2007 and 2010. Motorcycles are a combination of search, experience and credence attributes and consumers cannot observe product quality perfectly. Empirical analysis shows that the vertical and horizontal characteristics of motorcycles do not have a clear impact on the sellers’ decisions to disclose product quality. At the same time, specialist journals do not favor any specific motorcycle category when they choose which model to test. With respect to the results of the tests, the quality disclosed by motorcycle companies is systematically biased upward, but only slightly. On the whole, market efficiency is not threatened by asymmetric information and credence attributes.