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Information asymmetry and the role of traceability systems

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  • Jill E. Hobbs

    (Department of Agricultural Economics, University of Saskatchewan, 51 Campus Drive, Saskatoon, Saskatchewan, S7N 5A8, Canada)

Abstract

The role of food traceability systems in resolving information asymmetry is explored. Three functions of traceability systems are identified: ex post reactive systems that allow the traceback of affected products in the event of a contamination problem so as to minimize social costs, ex post systems that facilitate the allocation of liability, and information systems that provide ex ante quality verification. A taxonomy of traceability systems illustrates the multidimensional nature of the information problems related to food safety and food quality. A model of ex ante quality verification and ex post traceability systems is used to demonstrate the different functions and incentives of a traceability system. Finally, examples of private sector and regulatory traceability initiatives are discussed within the context of the ex post and ex ante models developed in the paper. [EconLit citations: Q130; Q180; L150.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 397-415, 2004.

Suggested Citation

  • Jill E. Hobbs, 2004. "Information asymmetry and the role of traceability systems," Agribusiness, John Wiley & Sons, Ltd., vol. 20(4), pages 397-415.
    • Handle: RePEc:wly:agribz:v:20:y:2004:i:4:p:397-415
    DOI: 10.1002/agr.20020
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    References listed on IDEAS

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    1. Hobbs, Jill E., 2003. "Traceability in Meat Supply Chains," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 4, pages 1-14, September.
    2. 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.
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