Governance Structure, Perception and Innovation in Credence Food Transactions: The Role of Community Networks
In this paper we use a combination of behavioral and new institutional economic perspectives to look at the transactions of “sustainable‐oriented” foods (e.g. organic food, fair trade, etc.) which often assume the characteristic of credence goods. When credence attributes are involved in the transaction (e.g. safety, fairness, etc.) information asymmetry and uncertainty tend to reduce the likelihood of different parties to enter in the transaction1. Because spot markets are unlikely to be used in this type of transactions, typical solutions are the use of hybrids, vertical integration and public monitoring (Vetter and Karantininis, 2002; Ménard and Valceschini, 2005). Moreover both consumers and producers (e.g. farmers) look at these products from a more utilitarian (cold) then a hedonic (hot) perspective. In this paper we address this issue by analyzing the effect of a “new” governance structure (GS) which is emerging in credence food transactions both at local and global level. We define this GS as a community network (CN) in which consumers and producers strongly integrate their goals by organizing a “club”.
|Date of creation:||Oct 2010|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.fooddynamics.org/|
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- Dos Santos Ferreira, R. & Thisse, J.-F., .
"Horizontal and vertical differentiation: The Launhardt model,"
CORE Discussion Papers RP
1216, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Dos Santos Ferreira, Rodolphe & Thisse, Jacques-Francois, 1996. "Horizontal and vertical differentiation: The Launhardt model," International Journal of Industrial Organization, Elsevier, vol. 14(4), pages 485-506, June.
- Claude Ménard & Egizio Valceschini, 2005.
"New Institutions for Governing the Agri-food Industry,"
- Claude Ménard, 2005. "New institutions for governing the agri-food industry," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(3), pages 421-440, September.
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