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A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy
Open accessAbstract
Demand for healthy, safe, and environmentally friendly food products has been increasing. In response, producers are marketing organic and other quality-differentiated foods, sometimes claiming to have followed sound environmental and animal welfare practices. These products frequently have unobservable quality attributes. If the profit-maximizing producer is able to deceive the consumer with a false claim, then he or she will enjoy a higher price with lower production costs (compared to the full disclosure outcome). The analysis described in this paper shows that repeat-purchase relationships and third-party monitoring are required for high-quality credence goods to be available. Policy implications of this analysis for national organic food standards are discussed.
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Citations
Cites
The Market for "Lemons": Quality Uncertainty and the Market Mechanism
Akerlof, G. A. (1970) · The Quarterly Journal of Economics · doi:10.2307/1879431 · Cited by 23,016
Free competition and the optimal amount of fraud
Darby, M. R., & Karni, E. (1973) · The Journal of Law and Economics · doi:10.1086/466756 · Cited by 3,947
Cited by
The Reliability of Certification: Quality Labels as a Consumer Policy Tool
Jahn, G., Schramm, M., & Spiller, A. (2005) · Journal of Consumer Policy · doi:10.1007/s10603-004-7298-6 · Cited by 431
Will Consumers Pay a Premium for Eco‐labeled Apples?
LOUREIRO, M. L., MCCLUSKEY, J. J., & MITTELHAMMER, R. C. (2002) · Journal of Consumer Affairs · doi:10.1111/j.1745-6606.2002.tb00430.x · Cited by 388
Self-citationInformation asymmetry and the role of traceability systems
Hobbs, J. E. (2004) · Agribusiness · doi:10.1002/agr.20020 · Cited by 288
Albersmeier, F., Schulze, H., Jahn, G., & Spiller, A. (2009) · Food Control · doi:10.1016/j.foodcont.2009.01.010 · Cited by 219
Quality preferences and pricing of fresh-cut salads in Italy: New evidence from market data
Pilone, V., Stasi, A., & Baselice, A. (2017) · British Food Journal · doi:10.1108/bfj-09-2016-0419 · Cited by 30
Metadata
- Authors
- McCluskey, J. J.
- Venue
- Agricultural and Resource Economics Review
- Publisher
- Cambridge University Press (CUP)
- Published
- 2000-04
- Volume
- 29
- Issue
- 1
- Pages
- 1-9
- ISSN
- 1068-2805 (ISSN-L)
- 2372-2614
- OpenAlex
- W2156380610
- Cited by
- 266
- References
- 2
- FWCI
- 12.53
- Type
- journal article
- Language
- en
- Open access
- bronze
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
