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Governance Structure, Perception and Innovation in Credence Food Transactions: The Role of Community Networks

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  • Pascucci, Stefano

Abstract

In this paper we use a combination of behavioral and new institutional economic perspectives to look at the transactions of “sustainable‐oriented” foods (e.g. organic food, fair trade, etc.) which often assume the characteristic of credence goods. When credence attributes are involved in the transaction (e.g. safety, fairness, etc.) information asymmetry and uncertainty tend to reduce the likelihood of different parties to enter in the transaction1. Because spot markets are unlikely to be used in this type of transactions, typical solutions are the use of hybrids, vertical integration and public monitoring (Vetter and Karantininis, 2002; Ménard and Valceschini, 2005). Moreover both consumers and producers (e.g. farmers) look at these products from a more utilitarian (cold) then a hedonic (hot) perspective. In this paper we address this issue by analyzing the effect of a “new” governance structure (GS) which is emerging in credence food transactions both at local and global level. We define this GS as a community network (CN) in which consumers and producers strongly integrate their goals by organizing a “club”.

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Bibliographic Info

Paper provided by International European Forum on Innovation and System Dynamics in Food Networks in its series 2010 Internatonal European Forum, February 8-12, 2010, Innsbruck-Igls, Austria with number 100591.

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Date of creation: Oct 2010
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Handle: RePEc:ags:iefi10:100591

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Web page: http://www.fooddynamics.org/

Related research

Keywords: Agribusiness; Agricultural and Food Policy; Farm Management; Food Consumption/Nutrition/Food Safety; Industrial Organization; Production Economics; Research Methods/ Statistical Methods;

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  1. Dos Santos Ferreira, Rodolphe & Thisse, Jacques-Francois, 1996. "Horizontal and vertical differentiation: The Launhardt model," International Journal of Industrial Organization, Elsevier, vol. 14(4), pages 485-506, June.
  2. Claude Ménard, 2005. "New institutions for governing the agri-food industry," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(3), pages 421-440, September.
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Cited by:
  1. Pascucci, Stefano & Cicatiello, Clara & Franco, Silvio & Pancino, Barbara & Davide, Marino, 2011. "Back to the Future? Understanding Change in Food Habits of Farmers' Market Customers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 14(4).
  2. Cembalo, Luigi & Lombardi, Alessia & Pascucci, Stefano & Dentoni, Domenico & Migliore, Giuseppina & Verneau, Fabio & Schifani, Giorgio, 2012. "The Beauty of the Commons? Consumers’ participation in Food Community Networks," 2012 AAEA/EAAE Food Environment Symposium, May 30-31, Boston, MA 123531, Agricultural and Applied Economics Association.
  3. Lombardi, Alessia & Pascucci, Stefano & Cembalo, Luigi & Dentoni, Domenico, 2012. "Governance Mechanisms in Food Community Networks," 2012 International European Forum, February 13-17, 2012, Innsbruck-Igls, Austria 144980, International European Forum on Innovation and System Dynamics in Food Networks.

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