IDEAS home Printed from https://ideas.repec.org/a/ags/jordng/174510.html
   My bibliography  Save this article

Assessment of Enforcement Mechanism for Pork Traceability System in Korea Using Mixed Strategy Nash Equilibrium

Author

Listed:
  • Song, Yanghoon

Abstract

The National Agricultural Products Quality Management Service (NAQS) of Korea initiated enforcing the food traceability system since 1994. However, the effectiveness of NAQS’ enforcement has been in dispute. To provide a framework for valid assessment of NAQS’ enforcement mechanism, the Mixed Strategy Nash Equilibrium, is used. Also, to cover the long range of seller’s and NAQS’ strategies, a distribution-based model is developed, along with a mean-based model. The analysis is done for pork labeling because pork is the sensitive food item for traceability and labeling. Also, the analysis is limited to year 2009 due to data availability. The results from the mean-based model suggest that NAQS needed to increase the raid probability for pork significantly from the current 0.1% to 16% in 2009. The cheating probability for pork labeling is calculated as 1.5% in 2009. However, it was found that the data on fines and revenues by cheating are highly skewed. This made implications from the mean-based model unreliable. Through the sensitivity analysis, it was found that the court needs to increase the amount of fine and the most frequently observed Mixed Strategy Nash Equilibrium would be for the seller to cheat with probability of 1.3% and for NAQS to raid with probability of 0.1%, which was quite close to the actual raid probability of NAQS in 2009.

Suggested Citation

  • Song, Yanghoon, . "Assessment of Enforcement Mechanism for Pork Traceability System in Korea Using Mixed Strategy Nash Equilibrium," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 35(01), pages 1-16.
    • Handle: RePEc:ags:jordng:174510
    DOI: 10.22004/ag.econ.174510
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/174510/files/35_1_1.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.174510?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Maskin, Eric & Tirole, Jean, 1988. "Corrigendum to 'A Theory of Dynamic Oligopoly, III, Cournot Competition' (vol. 31, no. 4)," European Economic Review, Elsevier, vol. 32(7), pages 1567-1568, September.
    2. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    3. McCluskey, Jill J., 2000. "A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy," Agricultural and Resource Economics Review, Cambridge University Press, vol. 29(1), pages 1-9, April.
    4. Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles," Econometrica, Econometric Society, vol. 56(3), pages 571-599, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lau, Sau-Him Paul, 2001. "Aggregate Pattern of Time-dependent Adjustment Rules, II: Strategic Complementarity and Endogenous Nonsynchronization," Journal of Economic Theory, Elsevier, vol. 98(2), pages 199-231, June.
    2. Chen, Yongmin & Rosenthal, Robert W., 1996. "Dynamic duopoly with slowly changing customer loyalties," International Journal of Industrial Organization, Elsevier, vol. 14(3), pages 269-296, May.
    3. Seki, Erika, 2006. "Effects of rotation scheme on fishing behaviour with price discrimination and limited durability: Theory and evidence," Journal of Development Economics, Elsevier, vol. 80(1), pages 106-135, June.
    4. Boone, J., 2004. "Balance of power," Other publications TiSEM dcff47a3-8a29-4ec3-a752-8, Tilburg University, School of Economics and Management.
    5. Boone, J., 2003. "'Be nice, unless it pays to fight' : A new theory of price determination with implications for competition policy," Other publications TiSEM 7066cb71-3c22-4565-8c71-5, Tilburg University, School of Economics and Management.
    6. Drew Fudenberg, 2015. "Tirole's Industrial Regulation and Organization Legacy in Economics," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 771-800, July.
    7. Zhongmin Wang, 2009. "(Mixed) Strategy in Oligopoly Pricing: Evidence from Gasoline Price Cycles Before and Under a Timing Regulation," Journal of Political Economy, University of Chicago Press, vol. 117(6), pages 987-1030, December.
    8. Vernasca, Gianluigi, "undated". "Dynamic Price Competition with Price Adjustment Costs and Product Differentiation," Economic Research Papers 269565, University of Warwick - Department of Economics.
    9. Boone, J., 2002. "'Be Nice Unless it Pays to Fight' : A New Theory of Price Determination with Implications for Competition Policy," Other publications TiSEM 739723a0-ffec-49c9-bef8-7, Tilburg University, School of Economics and Management.
    10. Nobel Prize Committee, 2014. "Market power and regulation (scientific background)," Nobel Prize in Economics documents 2014-2, Nobel Prize Committee.
    11. Roy Chowdhury, Prabal, 2008. "Bertrand-Edgeworth equilibrium with a large number of firms," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 746-761, May.
    12. Boone, J., 2004. "Balance of Power," Other publications TiSEM d3f8cd4b-eaf0-4c1c-aed4-5, Tilburg University, School of Economics and Management.
    13. Luís Cabral, 2018. "We’re Number 1: Price Wars for Market Share Leadership," Management Science, INFORMS, vol. 64(5), pages 2013-2030, May.
    14. Prabal Roy Chowdhury, 2004. "Bertrand-Edgeworth duopoly with linear costs: A tale of two paradoxes," Discussion Papers 04-13, Indian Statistical Institute, Delhi.
    15. Boone, Jan, 2004. "Balance of Power," CEPR Discussion Papers 4733, C.E.P.R. Discussion Papers.
    16. Tiffany Ding & Dominique Perrault-Joncas & Orit Ronen & Michael I. Jordan & Dirk Bergemann & Dean Foster & Omer Gottesman, 2025. "Marketplace Operators Can Induce Competitive Pricing," Papers 2503.06582, arXiv.org, revised Oct 2025.
    17. Do, Jihwan & Miklós-Thal, Jeanine, 2023. "Partial secrecy in vertical contracting," International Journal of Industrial Organization, Elsevier, vol. 90(C).
    18. Jayakumar Subramanian & Amit Sinha & Aditya Mahajan, 2023. "Robustness and Sample Complexity of Model-Based MARL for General-Sum Markov Games," Dynamic Games and Applications, Springer, vol. 13(1), pages 56-88, March.
    19. Cuffaro, Nadia & Di Giacinto, Marina, 2015. "Credence goods, consumers’ trust in regulation and high quality exports," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(2), pages 1-19, August.
    20. V. Bhaskar & George J. Mailathy & Stephen Morris, 2009. "A Foundation for Markov Equilibria in Infinite Horizon Perfect Information Games," Levine's Working Paper Archive 814577000000000178, David K. Levine.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jordng:174510. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/kreinkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.