Consumer confusion and multiple equilibria

This paper focuses on consumer confusion when firms may choose between credible and non-credible certification systems for signalling quality. It is shown that the presence of confused consumers leads to the emergence of multiple stable equilibria, in which either all firms select the credible certification or all firms select the non-credible certification. A situation with numerous confused consumers is characterized by the complete absence of credible certification.Quality, certification

The Regulatory Choice between a Label and a Minimum-Quality Standard

This paper revisits the issue of the regulatory choice between a mandatory label and a minimum-quality standard. When the cost of regulation is relatively low, we show that the socially optimal choice depends on the producers\u27 cost structure for complying with regulation and improving quality. Under a marginal cost for improving quality, the mandatory labeling is sufficient for reaching the socially optimal level of quality. Under a fixed cost for improving quality, we show that each instrument or the combination of both instruments may emerge at the equilibrium

Inspection Intensity and Market Structure

An investigation of financing an inspection policy while allowing the enforcement of a market regulation is described. A simple model shows that the intensity of controls depends on the market structure. Under a given number of firms, the per-firm probability of controls is lower than one, since firms\u27 incentive to comply with regulation holds under positive profits. In this case, a lump-sum tax is used for limiting distortions coming from financing with a fixed fee. Under free entry, the per-firm probability of controls is equal to one, and only a fixed fee that prevents excess entry is used to finance inspection

The Collective-Quality Promotion in the Agribusiness Sector: An Overview

This paper reviews the economic effects of collective-quality promotion through a survey of the recent literature devoted to common labeling and professional groups. Benefits and costs of common labeling and professional groups for improving quality are detailed. Some empirical facts are presented, mainly focusing on some European examples, since many European countries have a long history of producer-owned marketing programs. This paper shows that in some cases the collective-quality promotion can be a successful strategy for firms/farmers

Politique de la concurrence et secteur agro-alimentaire dans l’Union européenne

Le secteur agro-alimentaire dans l'Union européenne (UE) se caractérise par la coexistence d'entreprises agricoles de taille relativement modeste et de firmes de grande taille pour l'industrie en amont (industrie fournissant les intrants) et en aval (industrie de transformation, grande distribution). Cette taille modeste des exploitations agricoles par rapport à leur aval et à leur amont peut être défavorable à un partage équilibré de la valeur ajoutée entre les différents maillons des filières agro-alimentaires, dans la mesure où ce partage dépend des pouvoirs de marché et de négociation des uns et des autres. L'Unité mixte de recherche Economie publique INRA-INAPG a analysé comment la politique de la concurrence s'exerce dans le secteur agro-alimentaire européen. Cet article de synthèse a pour objectif de présenter les grandes lignes de cette politique pour les marchés de l'agro-alimentaire dans l'UE. Les principes économiques et juridiques sont brièvement rappelés, avant d'étudier les principales décisions françaises et européennes.

Dietary Models and Challenges for Economics

This introductory article presents the three main challenges faced in economics to issues raised by dietary models. The first part of this paper examines the dietary models that maximise the health profile of a population under various constraints, including environmental and agronomic criteria. The second part introduces the possibilities of economic modelling to complement these dietary models, despite the limitations of economic approaches. The third part suggests new research proposals by asserting that overlooked questions deserve further scrutiny. We emphasise that economic models are particularly useful to analyse trade-offs between the various objectives underlying a sustainable food system. However, possible improvements should tackle: first, possible substitutions between foods categories by consumers; second, adjustments in supply chains; and third, measures of inequality resulting from significant changes towards sustainability. Such improvements may be difficult to realize but are technically possible

Welfare Impact of Information with Experiments: The Crucial Role of the Price Elasticity of Demand

This paper focuses on the welfare effects of information computed from experimental methods eliciting willingness-to-pay. First, a theoretical model shows that the size of the welfare variation is related to the elasticity of the demand under the absence of information about a characteristic. Second, our estimates indicate that consumer demand from a laboratory auction is more price-elastic than time-series demand for similar products. As a result, the welfare change directly derived from individual willingness-to-pay is overestimated compared to the welfare change linked to an approach combining time-series demand with the mean willingness-to-pay premium.Experiment, Welfare, Consumers, Information, Demand

Dietary Models and Challenges for Economics

This introductory article presents the three main challenges faced in economics to issues raised by dietary models. The first part of this paper examines the dietary models that maximise the health profile of a population under various constraints, including environmental and agronomic criteria. The second part introduces the possibilities of economic modelling to complement these dietary models, despite the limitations of economic approaches. The third part suggests new research proposals by asserting that overlooked questions deserve further scrutiny. We emphasise that economic models are particularly useful to analyse trade-offs between the various objectives underlying a sustainable food system. However, possible improvements should tackle: first, possible substitutions between foods categories by consumers; second, adjustments in supply chains; and third, measures of inequality resulting from significant changes towards sustainability. Such improvements may be difficult to realize but are technically possible

The Financing of Safety Controls

L’objectif de cet article est d’étudier le lien entre une po­litique d’inspection visant à réduire les risques industriels et son mode de financement. Un modèle théorique montre que l’intensité des contrôles et son mode de financement dépendent de la structure de concurrence sur les marchés. Quand le nombre de firmes en concurrence est donné, la probabilité de contrôle est inférieure à un et une combinai­son alliant taxe et frais fixe payés par les entreprises permet de limiter les distorsions de marché. Dans un contexte de libre entrée, la probabilité de contrôle est égale à un et, seul un frais fixe payé par les entreprises est utilisé pour financer la politique de contrôle. À partir de ces résultats, cet article étudie la capacité des firmes à couvrir un frais fixe qui pourrait financer de nouveaux inspecteurs pour renforcer les contrôles des sites industriels à haut risque en France. Il est montré que la charge liée à l’embauche de nouveaux inspecteurs représente moins de 1% des profits annuels des firmes disposant de nombreux sites à risques.The aim of this paper is to investigate the link between an inspection policy designed to prevent industrial accidents and some financing instruments able to finance it. A simple theoretical model shows that the intensity of controls and the way to finance it depend on the market structure. Under a given number of firms, the per-firm probability of controls is lower than one and a combination of lump-sum tax and fixed fee is used for limiting market distortions. Under free entry/exit, the per-firm probability of controls is equal to one, and only a fixed fee is selected. Following these findings, we empirically study the ability of firms to cover a fixed fee that could finance the budget for additional inspectors, necessary to guarantee safety of high-risk plants in France. We show that the overall burden linked to the fixed fee covering the cost of new inspectors represents less than 1% of annual profits of firms with numerous high-risk plants