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The Strategic Use of Private Quality Standards in Food Supply Chains

Referierte Aufsätze Web of Science

Vanessa von Schlippenbach, Isabel Teichmann

In: American Journal of Agricultural Economics 94 (2012), 5, S. 1189-1201


We explore the strategic role of private quality standards in food supply chains. Considering two symmetric retailers that are exclusively supplied by a finite number of producers and endogenizing the suppliers' delivery choice, we show that there exist two asymmetric equilibria in the retailers' quality requirements. Our results reveal that the retailers use private quality standards to improve their bargaining position in the intermediate goods market. This is associated with inefficiencies in the upstream production, which can be mitigated by enforcing a minimum quality standard.

JEL-Classification: L15;L42;Q13
Keywords: buyer power, private quality standards, vertical relations