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Explaining the Emergence of Private Standards in Food Supply Chains

Eric Giraud-Héraud 1, 2, Cristina Grazia 3, Abdelhakim Hammoudi 2

(07/11/2012)

This paper provides an original theoretical framework to better understand the raise of private standards in agrifood chains. Reasons for the emergence and conditions for the effectiveness of private standards are identified, by investigating retailers' strategic behaviour and, more precisely, both interactions among retailers and upstream producers and the role of consumer behaviour vis-àvis the food safety risk. We show that a relatively strict Minimum Quality Standard (MQS) may incentive the retailer to develop an even more demanding private standard, when market-driven incentive is relatively high; this result crucially depends on consumer risk misperception. Setting a private standard may improve market access for upstream producers. In addition, it may reduce food safety risk and, at the same time, improve consumer surplus.

1 :	Department of Economics, Ecole Polytechnique
	CNRS : UMR7176 – Polytechnique - X
2 :	Institut National de la Recherche Agronomique
	Institut national de la recherche agronomique (INRA)
3 :	Agricultural Economics and Engineering Department
	University of Bologna

Domaine

:

Économie et finance quantitative/Econométrie de la finance

Mots Clés : Private standards – vertical relationships – risk misperception

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Contributeur : Department Of Economics <>

Soumis le : Mercredi 7 Novembre 2012, 12:10:09

Dernière modification le : Mercredi 7 Novembre 2012, 13:26:01