IDEAS home Printed from https://ideas.repec.org/p/ags/eaae99/7754.html
   My bibliography  Save this paper

Trust and the Profitability of Rule-Breaking in Grain Production

Author

Listed:
  • Hirschauer, Norbert
  • Musshoff, Oliver

Abstract

Malpractice in food production entails unacceptable procedures and undesirable product qualities and other negative material outcomes. Despite their physical implications, behavioural sources of risk have become known as moral hazards. The probability of malpractice increases with attached profits. It decreases with the probability of disclosure and resulting losses. It also decreases with social values, emotional bonds etc. which prevent food producers from yielding to economic temptations. Trust can be generated both by reducing the profitability of malpractice and by enhancing social trust factors. Referring to Hennessy et al. (2003), who conclude that misdirected incentives are a major source of food risk, we focus on the former and analyse the incentives related to various regulations in grain production.

Suggested Citation

  • Hirschauer, Norbert & Musshoff, Oliver, 2006. "Trust and the Profitability of Rule-Breaking in Grain Production," 99th Seminar, February 8-10, 2006, Bonn, Germany 7754, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae99:7754
    DOI: 10.22004/ag.econ.7754
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/7754/files/sp06hi01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.7754?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hennessy, David A. & Roosen, Jutta & Jensen, Helen H., 2003. "Systemic failure in the provision of safe food," Food Policy, Elsevier, vol. 28(1), pages 77-96, February.
    2. Hirschauer, Norbert, 2004. "A model-based approach to moral hazard in food chains - What contribution do principal-agent-models make to the understanding of food risks induced by opportunistic behaviour?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 53(05), pages 1-14.
    3. Stiglitz, Joseph E, 1987. "The Causes and Consequences of the Dependence of Quality on Price," Journal of Economic Literature, American Economic Association, vol. 25(1), pages 1-48, March.
    4. S. Andrew Starbird, 2005. "Moral Hazard, Inspection Policy, and Food Safety," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 15-27.
    5. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
    6. Demski, Joel S. & Sappington, David, 1984. "Optimal incentive contracts with multiple agents," Journal of Economic Theory, Elsevier, vol. 33(1), pages 152-171, June.
    7. John A. Fox & David A. Hennessy, 1999. "Cost-Effective Hazard Control in Food Handling," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 359-372.
    8. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hirschauer, Norbert & Musshoff, Oliver, 2007. "A game-theoretic approach to behavioral food risks: The case of grain producers," Food Policy, Elsevier, vol. 32(2), pages 246-265, April.
    2. Hirschauer, Norbert & Musshoff, Oliver & Scheerer, Sebastian, 2006. "An Interdisciplinary Approach to White-collar Crime in the Food Sector," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25688, International Association of Agricultural Economists.
    3. Norbert Hirschauer & Stefan Zwoll, 2008. "Understanding and managing behavioural risks: the case of malpractice in poultry production," European Journal of Law and Economics, Springer, vol. 26(1), pages 27-60, August.
    4. Zwoll, Stefan & Hirschauer, Norbert, 2006. "Reduction of Behavioural Food Risks: An Analysis of Economic Incentives and Social Context Factors in the German Poultry Chains," 99th Seminar, February 8-10, 2006, Bonn, Germany 7730, European Association of Agricultural Economists.
    5. Hirschauer, Norbert & Zwoll, Stefan, 2006. "Understanding and Managing Behavioural Risks -The Case of Food Risks Caused by Malpractice in Poultry Production," Working Paper Series 10287, Humboldt University Berlin, Department of Agricultural Economics.
    6. Michael Ollinger & John Bovay, 2020. "Producer Response to Public Disclosure of Food‐Safety Information," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 186-201, January.
    7. Ollinger, Michael & Benicio, Casiano, 2014. "The Food Safety Performance of Chicken Suppliers to the National School Lunch Program," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169380, Agricultural and Applied Economics Association.
    8. Liang, Jing & Jensen, Helen H., 2008. "Marketing Agreement, Food Safety and Contract Design," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6434, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Piper, A. & Kühl, R., 2015. "Täuschung im Lebensmittelverkehr – Ein Prinzipal-Agenten-Modell," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 50, March.
    10. Anna Nagurney & Dong Li, 2014. "Equilibria and dynamics of supply chain network competition with information asymmetry in quality and minimum quality standards," Computational Management Science, Springer, vol. 11(3), pages 285-315, July.
    11. Lars Hornuf & Matthias Schmitt & Eliza Stenzhorn, 2020. "Does a Local Bias Exist in Equity Crowdfunding?," CESifo Working Paper Series 8154, CESifo.
    12. Antonio De Pin, 2013. "The Opportunities of Made in Italy Food in Chinese Market," Working Papers 2013: 15, Department of Economics, University of Venice "Ca' Foscari".
    13. Poitevin, Michel, 1989. "Information et marchés financiers : une revue de littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 65(4), pages 555-589, décembre.
    14. Moisés de Andrade Resende Filho & Brian L. Buhr, 2006. "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 In The Us," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 127, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    15. Greenwald, Bruce C. & Stiglitz, Joseph E., 1987. "Imperfect information, credit markets and unemployment," European Economic Review, Elsevier, vol. 31(1-2), pages 444-456.
    16. Liran Einav & Amy Finkelstein & Mark R. Cullen, 2010. "Estimating Welfare in Insurance Markets Using Variation in Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(3), pages 877-921.
    17. Michael Krapp, 2000. "Relative Leistungsbewertung im dynamischen Kontext — Eine Analyse der Kollusionsproblematik bei wiederholter Delegation," Schmalenbach Journal of Business Research, Springer, vol. 52(3), pages 257-277, May.
    18. Nahum D. Melumad, 1989. "Asymmetric information and the termination of contracts in agencies," Contemporary Accounting Research, John Wiley & Sons, vol. 5(2), pages 733-753, March.
    19. Huang, Hongyun & Mbanyele, William & Wang, Fengrong & Song, Malin & Wang, Yuzhang, 2022. "Climbing the quality ladder of green innovation: Does green finance matter?," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    20. Grolleau, Gilles & Caswell, Julie A., 2006. "Interaction Between Food Attributes in Markets: The Case of Environmental Labeling," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(3), pages 1-14, December.

    More about this item

    Keywords

    Crop Production/Industries;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaae99:7754. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.