Improving Food Quality through Institutional Innovations: Using a Free‐Rider Approach for Collective Action

Ernst-August Nuppenau

No 100460, 2010 International European Forum, February 8-12, 2010, Innsbruck-Igls, Austria from International European Forum on System Dynamics and Innovation in Food Networks

Abstract: This paper outlines how a team work approach, recently suggested in institutional economics to overcome the problem of externalities, can be used to promote better food quality. Cost sharing as “team work” is considered a novel institution to improve food quality by giving incentives to overcome the public good character of quality. We translate the approach from negative to positive externalities. Hereby: (1) We make a reference to the current state of the discussion on how food quality depends on efforts of a food industry to get a better image and discuss how much need there is to improve quality. (2) An outline of a mathematical approach of a “team work” is presented in the provision of quality as a positive externality and (3) the approach is adapted to a likely team building effort in a food industry. Finally some remarks are made how to stimulate a process of team building and the role of a government is addressed. At the core of the paper we see the argument that free riding on quality can be avoided if collective actions or team building processes occur in a community. A team is modeled as partnership of producers in which costs for quality improvement are shared.

Keywords: Agribusiness; Agricultural and Food Policy; Farm Management; Food Consumption/Nutrition/Food Safety; Production Economics; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 13
Date: 2010-10
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iefi10:100460

DOI: 10.22004/ag.econ.100460

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