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markets. Thus, economic consequences of labelling high-quality goods are high in value to consumers and low in value for conventional goods, which the later is even lower compared to when the goods are in the market of pooled equilibrium. Moreover, they suggested that labelling provides the high-quality goods producers a routine incentive to realise gains as the expense of low-quality producers.

However, this is not entirely the case in the Halal market, where introduction of Halal labelling can be perceived not to compete for the existing consumers of conventional non-Halal goods; but to serve mainly for Muslim consumers whose would never consume the conventional goods. Their analysis is expanded in Chapter 4.

Sedjo and Swallow (2002) also produced a graphical illustration in their analysis on the market implication of labelling consumer products (eco-labelled wood). Their analysis indicated that with some reasonable circumstances, some portion of consumers are willing to pay a price premium, yet a price differential may not arise. In addition, the authors claimed that, price premium would not arise although there exist substantial willingness to pay a premium (in voluntary labelling system), if demand of the high-quality is small compared to overall demand, certification costs are insignificant, and the additional demand is modest. This situation is also used in the second part of this paper (in Section 4.2), with slightly different settings.

While labelling the whole product lines create benefit from consumers' positive experience and may spread to other products bearing the same label, the reverse could also occur when consumers had negative experience of a product, affecting the other products of same line (Liebie, 2002). In relation to Halal logo/labelling, this situation is partly true especially under self-labelling. But if the producer uses certified third-party Halal labelling and cheats by not meeting the standard, it is most likely that only particular products under the producer's brand is doubted and not other producers bearing the same third-party Halal logo. Again, this complication is avoided in the analysis as producers are assumed to be honest and information is perfect.

3.4.2. Solutions to the Problem of Fraud

Dulleck and Kerschbamer (2001) provided an analysis to what they called a unified framework on the majority of specific models of credence goods, in which the market institution could eliminate without cost, the problem of fraud by producers if there exist three factors. First, if the consumers are homogeneous; second, if the economies of scope between diagnosis and treatment are large; and third, if the treatment is verifiable. Sufficient penalty could be used to minimise incentives for producers to fake their products quality, in addition to greater level of monitoring to increase the probability of dishonest producers to be penalised.

Additionally in the real world, such fraud activity is a serious offence specifically with reference to Halal market especially of Muslim-majority economies. In most cases when producers were found faking by selling non-Halal goods, their business licences would be revoked, their business reputations are dama本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。