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Modeling Interdependent Participation Incentives: Dynamics of a Voluntary Livestock Disease Control Program

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  • Wang, Tong
  • Hennessy, David A.

Abstract

This paper models producers’ interdependent incentives to participate in a voluntary livestock disease control program. Under strategic complementarity among participation decisions, after a slow start momentum can build such that market premium for participation and participation rate increase sequentially. Non-participation, partial participation and full participation can all be Nash equilibria while participation cost heterogeneity will dispose the outcome toward incomplete participation. We find plausible conditions under which temporary government subsidies to the least cost-effective producers causes tipping toward full participation. Applying parameters from the literature on Johnes’ disease, we illustrate factors that may affect participation. These include cost heterogeneity and program effectiveness.

Suggested Citation

  • Wang, Tong & Hennessy, David A., 2012. "Modeling Interdependent Participation Incentives: Dynamics of a Voluntary Livestock Disease Control Program," Hebrew University of Jerusalem Archive 122358, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:122358
    DOI: 10.22004/ag.econ.122358
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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