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“Regulation of Food Quality: Deep Capture and Economies of Scope between Innovation and Influence”

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  • Sheldon, Ian
  • Roe, Brian
  • Olimov, Jafar

Abstract

In this paper, existing work on credence goods is extended to include a "diagnosis" stage whereby ill-informed consumers rely on a third party to certify that food products have beneficial characteristics. This compares to existing models of credence goods which focus only on a "treatment" stage, i.e., food is simply certified as having such characteristics. Adding the diagnosis stage allows for "deep capture" by food producers who attempt to influence regulatory outcomes on what quality claims can be made about food products: specifically an innovator, the “expert”, can expend resources to “nudge” regulatory assessment of quality samples in a positive direction, assuming also that there are economies of scope between innovation and influence.

Suggested Citation

  • Sheldon, Ian & Roe, Brian & Olimov, Jafar, 2015. "“Regulation of Food Quality: Deep Capture and Economies of Scope between Innovation and Influence”," 2015 Conference, August 9-14, 2015, Milan, Italy 212255, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212255
    DOI: 10.22004/ag.econ.212255
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    References listed on IDEAS

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    1. Kathleen Segerson, 1999. "Mandatory versus voluntary approaches to food safety," Agribusiness, John Wiley & Sons, Ltd., vol. 15(1), pages 53-70.
    2. Yeon-Koo Che, 1995. "Revolving Doors and the Optimal Tolerance for Agency Collusion," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 378-397, Autumn.
    3. Olivier Bonroy & Christos Constantatos, 2015. "On the Economics of Labels: How Their Introduction Affects the Functioning of Markets and the Welfare of All Participants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 239-259.
    4. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    5. Matias Iaryczower & Matthew Shum, 2012. "The Value of Information in the Court: Get It Right, Keep It Tight," American Economic Review, American Economic Association, vol. 102(1), pages 202-237, February.
    6. Brian Roe & Ian Sheldon, 2007. "Credence Good Labeling: The Efficiency and Distributional Implications of Several Policy Approaches," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1020-1033.
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    Keywords

    Food Consumption/Nutrition/Food Safety; Public Economics;

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