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The Strategic Use of Private Quality Standards in Food Supply Chains

  • Teichmann, Isabel
  • von Schlippenbach, Vanessa

This paper highlights the strategic role retailers private quality standards play in food supply chains. Considering two symmetric downstream firms that are exclusively supplied by a finite number of upstream firms and letting the upstream firms decide which retailer to supply, we show that there exist two asymmetric equilibria in the downstream firms quality requirements. The asymmetry is driven by both an increase in the retailers buyer power and the retailers competition for suppliers. The use of private quality standards induces a decrease in social welfare, which can be softened by the implementation of a public minimum quality standard.

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File URL: http://purl.umn.edu/116079
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Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 116079.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:116079
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