The Strategic Use of Private Quality Standards in Food Supply Chains

Vanessa von Schlippenbach and Isabel Teichmann

No 1120, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper highlights the strategic role that private quality standards play in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the producers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. The asymmetry is driven by both the retailers.incentive to raise their buyer power and the retailers' competition for suppliers. We find that the use of private quality standards is detrimental to social welfare. A public minimum quality standard can remedy this unfavorable welfare outcome.

Keywords: Private quality standards; vertical relations; buyer power; food supply chain (search for similar items in EconPapers)
JEL-codes: L15 L42 Q13 (search for similar items in EconPapers)
Pages: 29 p.
Date: 2011
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The Strategic Use of Private Quality Standards in Food Supply Chains (2012)
Working Paper: The strategic use of private quality standards in food supply chains (2012)
Working Paper: The Strategic Use of Private Quality Standards in Food Supply Chains (2011)
Working Paper: The Strategic Use of Private Quality Standards in Food Supply Chains (2011)
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