A framework for the design and analysis of incentive systems for food safety control in supply chains

Since 2005 the EU food industry has primary legal responsibility for food safety control. This requires new responsibilities and relationships between government and industry, and between companies. This research presents a framework for incentive systems for food safety control in supply chains. It emphasizes key elements of food safety control from multiple perspectives and provides insights for the design and analysis of incentive systems for food safety control. An incentive system combines inter-company incentive mechanisms with intra-company decision making processes to control a hazard within the legal environment. Incentive mechanisms, which consist of a performance measure and a performance reward, induce companies to use control measures. The framework can be used to analyze the effectiveness and efficiency of alternative incentive systems in which companies have to cooperate with partners from other stages of the supply chain.Incentive mechanism, food safety, supply chain control., Agricultural and Food Policy,

PRICE DISCOVERY MECHANISMS AND ALTERNATIVES FOR CANADIAN AGRICULTURE; Part I: A Review of Pricing Mechanisms in Agriculture

The purpose of this section is to review pricing mechanisms in agriculture and food. We started by constructing a taxonomy and system of classification for pricing mechanisms that is rooted in economic theory. This framework was applied to 26 pricing mechanisms observed from the following product categories: · Beef · Hogs · Grains and oilseeds · Dairy · Poultry and Eggs · Processed Food and HorticultureDemand and Price Analysis,

The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting

We review recent literature on the role of financial reporting transparency in reducing governance-related agency conflicts among managers, directors, and shareholders, as well as in reducing agency conflicts between shareholders and creditors, and offer researchers some suggested avenues for future research. Key themes include the endogenous nature of debt contracts and governance mechanisms with respect to information asymmetry between contracting parties, the heterogeneous nature of the informational demands of contracting parties, and the heterogeneous nature of the resulting governance and debt contracts. We also emphasize the role of a commitment to financial reporting transparency in facilitating informal multiperiod contracts among managers, directors, shareholders, and creditors

Quality management and contractual incompleteness: grape procurement for high-end wines in Argentina

International audienceSourcing grapes from independent growers for use in top quality wines sold on the international market is a major organisational challenge for corporate wineries. Our paper adds to the small existing literature addressing these coordination issues in the New World wine sector, by going deeper into the specifics of the contracts, as well as the "transaction cost economising" argument. Based on a case-study carried out in the Argentine province of Mendoza, this article presents an in-depth analysis of the technical process, in order to identify the contractual hazards posed by asset specificity, measurement costs, and non-contractible actions. Drawing on contract completion and dual sourcing literature, it analyses the contractual and non contractual mechanisms (price incentives, grower monitoring, allocation of decision rights to the winery, role of backward integration into production) used to govern such grape transactions. Through our analysis, we were able to arrive at four main conclusions. Firstly, most agreements are still verbal, with the exception of occasional written contracts, limited to a few legal provisions. It became clear to us that this approach to forging agreements is not always adequate in managing the inherently complex interactions between grape varieties, soil, farming practices and wine-making processes in high-end wine production. Secondly, extensive decision rights are allocated to wineries, to deal with incompleteness. These are key decisions to be taken during the cropping and harvesting process. Thirdly, pricing is generally kept flexible, with grape prices negotiated ex-post. This means that trade imbalances tend to be resolved in the long term. Winegrowers also benefit from financial rewards to compensate for allocations. Finally, any potential opportunistic behaviour by wineries with regards to asset specificity (in particular yield limitation) and allocation of rights is kept at bay by mechanisms such as winery reputations and credit third-party guaranty. This type of behaviour by growers is similarly deterred through monitoring and vineyard ownership on the part of the wineries

Trust and Trustworthiness in Imbalanced Markets

In this thesis, we use the methodology of experimental economics to investigate issues of trust and trustworthiness in procurement and the supply chain. First, we develop a procurement model in which both seller-side and buyer-side decisions are endogenous to the trading relationship. We investigate how a real-world contractual incentive mechanism, retainage, can be used to overcome the seller-side moral hazard problem. We find that retainage can improve trade efficiency but in-creases market prices and may deter participation. We offer managerial insights on how to design the retainage mechanism, conditional on levels of trust and trustworthiness. Second, we extend the procurement model to incorporate a contingent contract and show analytically that this contract can mitigate the seller-side moral hazard problem. We observe in a lab experiment that suppliers strategically adjust their bids with a contingent contract and that the contingent contract has unintended behavioural con-sequences, with buyers rewarding sellers less for the quality of works delivered. The results have managerial implications for the use of hierarchical elements in contracts. Third, we analyse theoretically and experimentally the horizontal effects of supply chain late payments. We show that if firms discount payment received after the standard term, then late payments feed into higher prices and reduced competition. Reneging on a standard payment term entails a penalty for the buyer set by a third-party. If this penalty is not set carefully, a welfare loss arises due to price externalities. We demonstrate how free-riding payment behaviours may emerge among financially weaker buyers in the firm population

Transforming Energy Networks via Peer to Peer Energy Trading: Potential of Game Theoretic Approaches

Peer-to-peer (P2P) energy trading has emerged as a next-generation energy management mechanism for the smart grid that enables each prosumer of the network to participate in energy trading with one another and the grid. This poses a significant challenge in terms of modeling the decision-making process of each participant with conflicting interest and motivating prosumers to participate in energy trading and to cooperate, if necessary, for achieving different energy management goals. Therefore, such decision-making process needs to be built on solid mathematical and signal processing tools that can ensure an efficient operation of the smart grid. This paper provides an overview of the use of game theoretic approaches for P2P energy trading as a feasible and effective means of energy management. As such, we discuss various games and auction theoretic approaches by following a systematic classification to provide information on the importance of game theory for smart energy research. Then, the paper focuses on the P2P energy trading describing its key features and giving an introduction to an existing P2P testbed. Further, the paper zooms into the detail of some specific game and auction theoretic models that have recently been used in P2P energy trading and discusses some important finding of these schemes.Comment: 38 pages, single column, double spac