Lack of Credibility in Food Markets - Driving Medium Quality Food Out of the Market

Jan Christensen and Jesper T. Graversen

No 24539, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: Some food markets are dominated by high quality and standard quality segments, whereas medium quality products are almost absent. A modeling framework with asymmetric information regarding true quality of the products and the resulting lack of consumer confidence is presented. Uncertainty regarding the quality of alleged medium quality products provides certain consumer groups to divert consumptions away from medium quality to either standard or high quality products. These countervailing incentives explain the missing medium quality products. Empirical examples are given to motivate the model.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 10
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae05:24539

DOI: 10.22004/ag.econ.24539

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