Why did U.S. food retailers voluntarily pledge to go cage-free with eggs?

Xiao Dong

European Review of Agricultural Economics, 2025, vol. 52, issue 1, 98-122

Abstract: I develop a model of provision competition between food retailers to examine one potential economic rationale behind voluntary cage-free egg pledges. I show that competition pushes retailers to a prisoners’ dilemma equilibrium where retailers incur fixed costs to offer both non-cage-free and cage-free eggs to steal or prevent the loss of some basket-shopping consumers. In a dynamic setting, retailers can potentially sustain an equilibrium of higher profits by collectively withholding non-cage-free eggs. I show that changing supply conditions and consumer trends could have led to such an equilibrium with pledges acting as a signal to potentially facilitate tacit coordination.

Keywords: food retail competition; cage-free eggs; animal welfare (search for similar items in EconPapers)
Date: 2025
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