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The Strategic Use of Private Quality Standards in Food Supply Chains

  • Vanessa von Schlippenbach
  • Isabel Teichmann

We explore the strategic role of private quality standards in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the suppliers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. Our results reveal that the retailers use private quality standards to improve their bargaining position in the intermediate goods market. This is associated with inefficiencies in the upstream production, which can be mitigated by enforcing a minimum quality standard. Copyright 2012, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/ajae/aas070
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Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 94 (2012)
Issue (Month): 5 ()
Pages: 1189-1201

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Handle: RePEc:oup:ajagec:v:94:y:2012:i:5:p:1189-1201
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