A Game Theoretic Approach To Organic Foods: An Analysis Of Asymmetric Information And Policy
AbstractDemand for healthy, safe and environmentally friendly food products has been increasing. In response, producers are marketing organic and other quality-differentiated foods, sometimes claiming to have followed sound environmental and animal welfare practices. These products frequently have unobservable quality attributes. If the profit-maximizing producer is able to deceive the consumer with a false claim, then he or she will enjoy a higher price with lower production costs (compared to the full disclosure outcomes). The analysis described in this paper shows that repeat-purchase relationships and third party monitoring are required for high-quality credence goods to be available. Policy implications of this analysis for national organic food standards are discussed.
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Bibliographic InfoArticle provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.
Volume (Year): 29 (2000)
Issue (Month): 1 (April)
Demand and Price Analysis;
Other versions of this item:
- McCluskey, Jill J., 1999. "A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123706, Australian Agricultural and Resource Economics Society.
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
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