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Incentives, Information Systems and Competition

Author

Listed:
  • Peter Bogetoft

    (The Royal Veterinary and Agricultural University, Denmark)

  • Henrik B. Olesen

    (The Royal Veterinary and Agricultural University, Denmark)

Abstract

We show how different competitive regimes affect the ability to provide incentives based on noisy information systems. Reduced competition facilitates incentive provision. This may rationalize both vertical integration and horizontal integration as seen in many agricultural markets with uncertain quality grading. Moreover, if trading terms are settled before the information is observed, a noisy information system suffices to give proper incentives. This may rationalize the use of long term conditional price contracts in the trading of many agricultural products.

Suggested Citation

  • Peter Bogetoft & Henrik B. Olesen, 2000. "Incentives, Information Systems and Competition," CIE Discussion Papers 2000-12, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
    • Handle: RePEc:kud:kuieci:2000-12
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    Citations

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    Cited by:

    1. Hongli Feng & David A. Hennessy, 2009. "Production and Abatement Distortions under Noisy Green Taxes," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(1), pages 37-53, February.
    2. John A. Miranowski & Bruce A. Babcock, 2004. "Genetic Information in Agricultural Productivity and Product Development," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 73-87.
    3. Gustavo Magalhães de Oliveira & Paula Sarita Bigio Schnaider & Maria Sylvia Macchione Saes & Gaetano Martino, 2023. "Do private translation mechanisms encourage food safety in dairy production? Evidence from the Brazilian Conseleites," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 862-875, March.
    4. Brent Hueth & Philippe Marcoul & Roger G. Ginder, 2004. "Cooperative Formation and Financial Contracting in Agricultural Markets," Center for Agricultural and Rural Development (CARD) Publications 03-wp349, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    5. Mircea Epure, 2016. "Benchmarking for routines and organizational knowledge: a managerial accounting approach with performance feedback," Journal of Productivity Analysis, Springer, vol. 46(1), pages 87-107, August.
    6. Ibarburu, Maro A. & Lawrence, John D. & Busby, Darrell, 2007. "Economics of Increased Beef Grader Accuracy," 2007 Conference, April 16-17, 2007, Chicago, Illinois 37558, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    7. Moisés de Andrade Resende Filho & Brian L. Buhr, 2006. "A Principal-Agent Model For Evaluating The Economic Value Of A Beef Traceability System: A Case Study With Injection-Site Lesions Control In Fed Cattle In The Us," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 127, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Golan, Elise H. & Roberts, Tanya & Salay, Elisabete & Caswell, Julie A. & Ollinger, Michael & Moore, Danna L., 2004. "Food Safety Innovation In The United States: Evidence From The Meat Industry," Agricultural Economic Reports 34083, United States Department of Agriculture, Economic Research Service.

    More about this item

    Keywords

    Quality; Testing; Industrial Organization; Information Externalities;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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