IDEAS home Printed from https://ideas.repec.org/p/ias/cpaper/04-wp373.html
   My bibliography  Save this paper

Reputation, Quality Observability, and the Choice of Quality Assurance Systems

Author

Abstract

Participants in a supply chain of agricultural value-added products face significant challenges. Many of the costly distinctive traits desired by consumers are difficult (if not impossible) to observe even after consumption. A complicating factor, addressed here, is that in some circumstances delivered quality can only be imperfectly learned and/or affected stochastically by producers. Hence, both symmetric and asymmetric informational imperfections may be present. In order for markets for these classes of goods to arise, firms touting the quality of the product need to be trusted. A repeated-purchases model is developed to explore the fundamental economic factors that lie behind the choice of different quality assurance systems and their associated degrees of stringency by firms. Differences in the quality discoverability of a sought-after attribute, attractiveness of a market, and the value placed in the future are among the factors contributing to the implementation of widely diverse systems across participants in different markets. Close attention is paid to the role of reputations in providing the incentives for firms to deliver high-quality goods in an environment of symmetrically imperfect information.

Suggested Citation

  • Miguel Carriquiry & Bruce A. Babcock, 2004. "Reputation, Quality Observability, and the Choice of Quality Assurance Systems," Center for Agricultural and Rural Development (CARD) Publications 04-wp373, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  • Handle: RePEc:ias:cpaper:04-wp373
    as

    Download full text from publisher

    File URL: https://www.card.iastate.edu/products/publications/pdf/04wp373.pdf
    File Function: Full Text
    Download Restriction: no

    File URL: https://www.card.iastate.edu/products/publications/synopsis/?p=539
    File Function: Online Synopsis
    Download Restriction: no

    References listed on IDEAS

    as
    1. Reardon, Thomas & Farina, Elizabeth Maria Mercier Querido, 2001. "The Rise Of Private Food Quality And Safety Standards: Illustrations From Brazil," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 4(04).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. M. Laura Donnet & Dave D. Weatherspoon & John P. Hoehn, 2008. "Price determinants in top-quality e-auctioned specialty coffees," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 267-276, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ias:cpaper:04-wp373. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/caiasus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.