Abdelhakim Hammoudi

Joint Private Safety Standards and Vertical Relationships in Food Retailing

In recent years, it has become common for downstream firms to impose Joint Private Standards (JPSs) on upstream producers. In this paper, we present an original model of a vertical relationship, explaining the incentives for and the effects of such JPSs with an example concerning food safety. The risk of a food crisis is endogenously determined. Using the concept of cartel stability (d’Aspremont et al., 1983), it is shown that liability rules are crucial for JPSs to emerge, that a JPS can become a minimum quality standard, and that a more stringent JPS does not necessarily reduce the market risk.

Introduction to the Non-Cooperative Approach to Coalition Formation: The Case of the Blu-Ray/HD-DVD Standards' War

The concepts of the theory of endogenous coalition formation have not been utilized much to analyze issues in the field of applied economics. In this paper, we show how these concepts make a relevant and innovative contribution to these issues. We first illustrate the fundamentals of this theory and we present the concept of internal and external cartel stability. We provide an illustration of this concept through a basic example of an oligopoly in a cartelization situation. Then, we show the relevance of these concepts by analyzing the battle between the high-definition DVD-player standards: Sonys Blu-Ray and NEC/Toshibas HD-DVD.

Sanitary and phytosanitary standards: Does consumers’ health protection justify developing countries’ producers’ exclusion?

The objective of this paper is to analyze the effects public regulatory tools for food safety, notably maximum admitted contamination thresholds and official controls performed at importing country’s borders on both developing countries’ market access and consumers’ health. An Industrial Economics approach is developed that endogenizes the sanitary risk associated with imports by explicitly taking into account the interaction between the public regulatory tools and the strategic response of producers/exporters. Producers’ strategic reaction is shown to crucially depend on the characteristics of the economic environment. Moreover, a regulatory reinforcement may exacerbate producers/exporters exclusion without improving consumers’ health protection.

On the Emergence of Private Standards: An Industrial Organization Approach

This contribution aims at providing a focused discussion on the main economic issues associated with the emergence of private standards in agrifood chains. Public and private modes for food safety management are explored. Based on a critical review of the recent developments of Industrial Organization (IO) approaches, this contribution examines the rationale behind the emergence of private strategies for food safety governance, their effects on the food supply chain organization, and the strategic interactions between public regulator and private actors in the provision of food safety in agrifood markets. The analysis then draws the attention on the interactions between public regulatory instances (notably between the legislation and the official control system) and on their influence on the incentive for firms to develop voluntary standards. By focusing on buyer-supplier relations in international food supply chains, and based on recent theoretical developments in the IO literature, a simple formalization is finally proposed to investigate the role of public “output standards” and control imperfections in shaping buyer incentive to impose “process standards” over suppliers for import safety management purposes.

How do food safety regulations influence market price? A theoretical analysis

This study is in line with the debate concerning the compatibility between the qualitative and quantitative food production objectives. The purpose of this paper is to identify the causal relationship that may exist between public food safety regulations (specifically, the maximum authorised levels of chemical or microbiological contaminants), and the expected price in the spot markets (wholesale markets, for example).,The authors propose a theoretical industrial economic model that identifies the causal link which may exist between public food safety regulations (e.g. the maximum authorised levels of chemical or microbiological contaminants), the expected price in domestic markets, and the rate of exclusion of local producers. This general model allows one to characterize the price formation process in markets subject to maximum residue level constraints by focusing on the role of the official inspection systems established by public authorities.,The authors show how strengthening official controls does not systematically impact negatively on producers’ participation and does not always decrease supply. Moreover, the authors show that reinforcing the maximum permitted contamination thresholds is not always sufficient for ensuring consumer health.,The originality of the model is that it shows how all variables (economic and sanitary variables) interact in the formation of agricultural prices and determine the final size of the productive system (number of active producers). The characterisation of the market price as a function of producers’ investment efforts and of the level of official control reliability allows one to determine both the total supply and the proportion of this supply that is contaminated (i.e. does not comply with the maximum threshold of contamination).

Food safety management by private actors: rationale and impact on supply chain stakeholders

This paper first presents a state of the art of international and European public policies on food safety in agrifood supply chains. It also reviews initiatives set by private actors in this field. The analysis focuses on the economic effects resulting from the combination of these two approaches compared to their potential effects in terms of the reduction of sanitary risks faced by consumers. Starting from a critical review of the literature and from an analysis based on the new industrial economics tools, the authors show how, under certain conditions, the objective of safety in agrifood supply chains may be only partially achieved because of economic distortions arising from the combined effect of public policies and private standards.