Abstract
Traceability can link the identity of cattle feeders with retail beef cuts. The economic problem for the packer implementing traceability is to choose the level of investment in traceability and the level of incentive payments to cattle feeders so that cattle feeders will avoid production actions that can damage retail beef cuts. A case study of injection-site lesions in cattle is the basis for technical parameters to numerically solve this principal-agent problem. Results show that cattle feeders will give injections in sites preferred by the packer even with low rates of successful tracking and minimal incentives.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 1091-1102 |
| Number of pages | 12 |
| Journal | American Journal of Agricultural Economics |
| Volume | 90 |
| Issue number | 4 |
| DOIs | |
| State | Published - 2008 |
Bibliographical note
Funding Information:The authors thank Professor Walter N. Thurman for editorial assistance, Professor Robert P. King for earlier assistance with the model solution, and two anonymous reviewers for their very helpful comments. Partial funding support was provided by the Center for Agricultural and Rural Development (CARD) at Iowa State University, Ames, IA. All remaining errors are the authors’.
Keywords
- Information asymmetry
- Principal-agent
- Supply chain management
- Traceability