M'hand Fares

From public to private safety regulation? The case of negotiated agreements in the French fresh produce import industry

Recent EU law of safety self-regulation by firms leads French fresh produce importers to negotiate with public authorities a collective self-monitoring safety agreement. This paper is a case study of such an agreement in the Perpignan import market. Its actual design poses a problem of incentive alignment as long as it does not fit in with theoretical conditions. Empirical evidence and two complementary bodies of the literature are used to deal with this issue. Firstly, drawing on the literature of incentive schemes in teams, we show that implementing a collective discipline within the group is highly unlikely. Secondly, by turning to the literature of voluntary approaches to food safety, we show that conditions for efficient enforcement are not met either. By introducing supermarkets as a third party we propose an enriched framework, which allows a better understanding of why importers abide by the agreement and allocate resources in safety control.

Renegotiation Design and Contract Solutions to the Hold-Up Problem

This paper surveys the literature on contractual solutions to the hold-up problem which has addressed the issue of how to design the optimal contractual arrangement to achieve efficient investments in the presence of contract incompleteness. Although scholars have argued that renegotiation design is a necessary condition to avoid the hold-up problem, some recent papers have seriously questioned this condition. We mainly show that renegotiation design remains a necessary condition to implement efficient investments. Copyright 2006 The Author Journal compilation

Brokers as Experts in the French Wine Industry

The increasing industrialization of the wine supply chain is often associated with a greater vertical coordination. Our paper shows that a spot market institutional arrangement like brokerage can still be a relevant coordination mechanism to mitigate the contractual hazards due to quality problems. Indeed, a broker can be viewed as an expert that can help the merchant to monitor the growers wine quality process. More precisely, if the merchant cannot credibly monitor the wine making process, it is Pareto improving to delegate this task to a broker. (JEL Classification: D82, L80, M12)

Using a multinomial probit to test for complementarity

This note shows that the structural parameter estimate of complementarity among innovation strategies can be recovered when the strategies are dichotomous if we use a multinomial probit model. That is, we can separate the complementarity between the innovation strategies from the unobserved heterogeneity, by estimating both the parameter of complementarity and the correlation coefficients in the error terms. This result holds because the multinomial probit, in contrast to the bivariate probit, is not an incoherent model.