Analysis and design of signaling transfer mechanism based on third-party certification: quality prestige index of traditional Chinese medicine enterprises / 中国中药杂志

ABSTRACT

Traditional Chinese medicine market is a typical market with information asymmetry, which may lead to "lemons" problem. Third-Party Certification is efficient path to solve the problem of information asymmetry. For this reason geo-authentic and commodity classes certification seems to be very important. But as we know, information asymmetry happen in the stages of traditional Chinese patent medicines market. So a signaling transfer mechanism, which can deliver the quality signal, is badly needed in TCM market. This paper analysis and design of signaling transfer mechanism based on Third-Party Certification, which called quality prestige index of TCM enterprises (QPITCM). QPITCM can display quality information as a signal run through the TCM market.