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Collective reputation, social norms, and participation:

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  • Saak, Alexander

Abstract

This paper analyzes a repeated games model of collective reputation with imperfect public monitoring and perfect local peer monitoring of efforts. Even when peer monitoring is local, firms may achieve higher profits under collective reputation by decreasing the cost of maintaining customers' trust. The optimal number of firms that share a common reputation is greater when (1) trades are more frequent and public information is disseminated more rapidly, (2) the deviation gain is smaller compared to the quality premium, (3) customers' information regarding firms' quality is more precise, or (4) intragroup information about firms' quality is more global. From a positive perspective, we suggest how social norms can influence the reputation of regional products. We also offer an efficiency explanation for food scares. From a normative point of view, in our model, protection of geographical indications increases and mandatory traceability decreases welfare and incentives to provide quality without taking into account direct implementation costs.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 1107.

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Date of creation: 2011
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Handle: RePEc:fpr:ifprid:1107

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Keywords: collective reputation; free riding; public monitoring; peer monitoring; peer sanction;

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References

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  4. Sébastien Pouliot & Daniel A. Sumner, 2008. "Traceability, Liability, and Incentives for Food Safety and Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 15-27.
  5. Kwamena K. Quagrainie & Jill J. McCluskey & Maria L. Loureiro, 2003. "A Latent Structure Approach to Measuring Reputation," Southern Economic Journal, Southern Economic Association, vol. 69(4), pages 966-977, April.
  6. Castriota Stefano & Delmastro Marco, 2010. "Individual and Collective Reputation: Lessons from the Wine Market," L'industria, Società editrice il Mulino, issue 1, pages 149-172.
  7. Landon, Stuart & Smith, Constance, 1998. "Quality expectations, reputation, and price," MPRA Paper 9774, University Library of Munich, Germany.
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  17. Bendor, Jonathan & Mookherjee, Dilip, 1990. "Norms, Third-Party Sanctions, and Cooperation," Journal of Law, Economics and Organization, Oxford University Press, vol. 6(1), pages 33-63, Spring.
  18. Babcock, Bruce A. & Hayes, Dermot J. & Lawrence, John D. & Clemens, Roxanne L., 2009. "Creating a Geographically Linked Collective Brand for High-Quality Beef: A Case Study," Staff General Research Papers 13022, Iowa State University, Department of Economics.
  19. Golan, Elise H. & Krissoff, Barry & Kuchler, Fred & Calvin, Linda & Nelson, Kenneth E. & Price, Gregory K., 2004. "Traceability In The U.S. Food Supply: Economic Theory And Industry Studies," Agricultural Economics Reports 33939, United States Department of Agriculture, Economic Research Service.
  20. Winfree, Jason A. & McCluskey, Jill J., 2003. "Collective Reputation And Quality," 2003 Annual meeting, July 27-30, Montreal, Canada 21927, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  21. Hirschauer, Norbert & Musshoff, Oliver, 2007. "A game-theoretic approach to behavioral food risks: The case of grain producers," Food Policy, Elsevier, vol. 32(2), pages 246-265, April.
  22. Ghatak, Maitreesh, 1999. "Group lending, local information and peer selection," Journal of Development Economics, Elsevier, vol. 60(1), pages 27-50, October.
  23. Robert Evans & Timothy W. Guinnane, 2007. "Collective Reputation, Professional Regulation and Franchising," Cowles Foundation Discussion Papers 1627, Cowles Foundation for Research in Economics, Yale University.
  24. Bruce A. Babcock & Quinn Weninger, 2004. "Can Quality Revitalize the Alaskan Salmon Industry?," Center for Agricultural and Rural Development (CARD) Publications 04-wp359, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  25. Rafael Rob & Arthur Fishman, 2005. "Is Bigger Better? Customer Base Expansion through Word-of-Mouth Reputation," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 1146-1175, October.
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Citations

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Cited by:
  1. Jin, Ling & Chen, Kevin Z. & Yu, Bingxin & Huang, Zuhui, 2011. "How prudent are rural households in developing transition economies:," IFPRI discussion papers 1127, International Food Policy Research Institute (IFPRI).
  2. Prasad, Sanjay K. & Pullabhotla, Hemant & Ganesh-Kumar, A., 2011. "Supply and demand for cereals in Nepal, 2010–2030:," IFPRI discussion papers 1120, International Food Policy Research Institute (IFPRI).
  3. Laborde Debucquet, David & Martin, Will & van der Mensbrugghe, Dominique, 2011. "Measuring the impacts of global trade reform with optimal aggregators of distortions:," IFPRI discussion papers 1123, International Food Policy Research Institute (IFPRI).
  4. Glendenning, Claire J. & Asenso-Okyere, Kwadwo & Babu, Suresh C., 2011. "Evaluation of value-added agricultural advisory services: Case study of agriclinics in Southern India," IFPRI discussion papers 1125, International Food Policy Research Institute (IFPRI).
  5. Francesconi, Gian Nicola & Wouterse, Fleur, 2011. "The renewed case for farmers' cooperatives: Diagnostics and implications from Ghana," IFPRI discussion papers 1129, International Food Policy Research Institute (IFPRI).
  6. Morley, Samuel & Piñeiro, Valeria & Robinson, Sherman, 2011. "A dynamic computable general equilibrium model with working capital for Honduras:," IFPRI discussion papers 1130, International Food Policy Research Institute (IFPRI).
  7. Zambrano, Patricia & Maldonado, Jorge H. & Mendoza, Sandra L. & Ruiz, Lorena & Fonseca, Luz Amparo & Cardona, Iván, 2011. "Women cotton farmers: Their perceptions and experiences with transgenic varieties: A case study for Colombia," IFPRI discussion papers 1118, International Food Policy Research Institute (IFPRI).
  8. Saak, Alexander E., 2013. "Traceability and Reputation in Supply Chains," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149988, Agricultural and Applied Economics Association.
  9. Yamauchi, Futoshi & Liu, Yanyan, 2011. "Impacts of an early education intervention on students' learning achievement: Evidence from the Philippines," IFPRI discussion papers 1121, International Food Policy Research Institute (IFPRI).
  10. Cai, Ximing & Yang, Yi-Chen E. & Zhao, Jianshi & Ringler, Claudia, 2011. "Can water allocation in the Yellow River basin be improved?: Insights from a multi-agent system model," IFPRI discussion papers 1117, International Food Policy Research Institute (IFPRI).
  11. Ulimwengu, John & Liverpool-Tasie, Saweda & Randriamamonjy, Josee & Ramadan, Racha, 2011. "Understanding the linkage between agricultural productivity and nutrient consumption: Evidence from Uganda," IFPRI discussion papers 1128, International Food Policy Research Institute (IFPRI).
  12. de Brauw, Alan & Gilligan, Daniel, 2011. "Using the regression discontinuity design with implicit partitions: The impacts of comunidades solidarias rurales on schooling in El Salvador," IFPRI discussion papers 1116, International Food Policy Research Institute (IFPRI).

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