Cho BH, Hooker NH. Voluntary vs. mandatory approaches to food safety: considering heterogeneous firms. Foodborne Pathog Dis 2007.
A critical assessment of voluntary approaches in regulatory programs is presented. When accounting for heterogeneous firms, with varying effectiveness of risk control, the optimality of a lump-sum financial incentive to encourage voluntary adoption is questioned. The paper uses a game-theoretic model to characterize the strategies of a regulator and firms. Using robust comparative statics, it can be shown that less efficient firms are less likely to participate in a voluntary food safety program. Adverse selection leads to lower overall risk control, suggesting mandatory control may be preferred.
Fouayzi H, Caswell JA, Hooker NH. Motivations of fresh-cut produce firms to implement quality management systems. Rev Agric Econ 2006.
A survey of the fresh-cut produce industry (e.g., bagged salads, baby carrots, stir-fry mixes, cut-fruit mixes) shows firms’ motivation to adopt quality management systems and the effects of implementation on firms and their relationships with suppliers and customers. Data from surveyed members of the International Fresh-cut Produce Association suggest that system adoption was very widespread. The effects were intra-firm (e.g., improved management and efficiency of quality systems) and inter-firm (e.g., improved identification and facilitation of trade with firms in the supply chain). Satisfaction with adoption of quality management systems was linked to many of the same factors.