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Quality classifications in competition price formation in the German wine market


Rössel, Jörg; Beckert, J (2012). Quality classifications in competition price formation in the German wine market. MPIfG Discussion Paper 12/3, University of Zurich.

Abstract

How do judgment devices influence price formation? We investigate this question through a study of the German wine market. The German wine market is characterized by the simultaneous existence of two classification systems: the official classification system referring to the “quality in the glass,” and the concept of “terroir,” introduced by a private association of quality winemakers, the Verband deutscher Prädikatsweingüter. We used a data set comprising 1,890 wines from 248 different wineries in the German wine-growing regions of Rheingau and Rheinhessen. Our results show that the two classification systems function as mutually exclusive strategic options for winemakers. We also show that the non-official classification of terroir is much more powerful in explaining price formation within the market.

Abstract

How do judgment devices influence price formation? We investigate this question through a study of the German wine market. The German wine market is characterized by the simultaneous existence of two classification systems: the official classification system referring to the “quality in the glass,” and the concept of “terroir,” introduced by a private association of quality winemakers, the Verband deutscher Prädikatsweingüter. We used a data set comprising 1,890 wines from 248 different wineries in the German wine-growing regions of Rheingau and Rheinhessen. Our results show that the two classification systems function as mutually exclusive strategic options for winemakers. We also show that the non-official classification of terroir is much more powerful in explaining price formation within the market.

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Additional indexing

Item Type:Working Paper
Communities & Collections:06 Faculty of Arts > Institute of Sociology
Dewey Decimal Classification:300 Social sciences, sociology & anthropology
Language:English
Date:2012
Deposited On:09 Jul 2012 08:26
Last Modified:27 Apr 2018 03:08
Series Name:MPIfG Discussion Paper
Number of Pages:26
ISSN:0944-2073
OA Status:Green
Official URL:http://www.mpifg.de/pu/mpifg_dp/dp12-3.pdf

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