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Improving Food Quality through Institutional Innovations: Using a Free‐Rider Approach for Collective Action

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  • Nuppenau, Ernst-August

Abstract

This paper outlines how a team work approach, recently suggested in institutional economics to overcome the problem of externalities, can be used to promote better food quality. Cost sharing as “team work” is considered a novel institution to improve food quality by giving incentives to overcome the public good character of quality. We translate the approach from negative to positive externalities. Hereby: (1) We make a reference to the current state of the discussion on how food quality depends on efforts of a food industry to get a better image and discuss how much need there is to improve quality. (2) An outline of a mathematical approach of a “team work” is presented in the provision of quality as a positive externality and (3) the approach is adapted to a likely team building effort in a food industry. Finally some remarks are made how to stimulate a process of team building and the role of a government is addressed. At the core of the paper we see the argument that free riding on quality can be avoided if collective actions or team building processes occur in a community. A team is modeled as partnership of producers in which costs for quality improvement are shared.

Suggested Citation

  • Nuppenau, Ernst-August, 2010. "Improving Food Quality through Institutional Innovations: Using a Free‐Rider Approach for Collective Action," 2010 International European Forum, February 8-12, 2010, Innsbruck-Igls, Austria 100460, International European Forum on System Dynamics and Innovation in Food Networks.
    • Handle: RePEc:ags:iefi10:100460
    DOI: 10.22004/ag.econ.100460
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    1. Narrod, Clare & Roy, Devesh & Okello, Julius & Avendaño, Belem & Rich, Karl & Thorat, Amit, 2009. "Public-private partnerships and collective action in high value fruit and vegetable supply chains," Food Policy, Elsevier, vol. 34(1), pages 8-15, February.
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