A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy
Year: 2000
Type: article
Abstract: 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.
Author: Jill J. McCluskey
Institution: Washington State University
Language: English
Topic: Organic Food and Agriculture
Subfield: Plant Science
Domain: Life Sciences
Open Access status: bronze
OpenAlex ID: W2156380610