A Principal-Agent Model for Evaluating the Economic Value of a Beef Traceability System: A Case Study with Injection-site Lesions Control in Fed Cattle

Moises Resende-Filho and Brian Buhr
Authors registered in the RePEc Author Service: Moisés de Andrade Resende Filho

MPRA Paper from University Library of Munich, Germany

Abstract: This article investigates the economic value and the optimal expected traceback rate of success for a traceability system with a case study of injection-site lesions in fed cattle in the US. By maintaining the identity of the feedlot owners corresponding to retail beef cuts, a traceability system enables the employment of incentive mechanisms by a meat packer to overcome supply chain information asymmetry. Results of this article show that the first-best action of producers may be induced by meat packers with incentive mechanisms created with a low expected traceback rate of success. This suggests that even inexpensive traceability systems may induce appropriate actions by producers and objectives of inducing compliance by suppliers may be less costly than objectives of recall.

Keywords: Information Asymmetry; Identity Preservation; Meat Traceability; Supply Chain Management (search for similar items in EconPapers)
JEL-codes: C61 D82 D86 (search for similar items in EconPapers)
Date: 2006-10-14
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (16)

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https://mpra.ub.uni-muenchen.de/3648/1/MPRA_paper_3648.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/6693/1/MPRA_paper_6693.pdf revised version (application/pdf)

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