publication . Article . 2017

Organic vs. Non-Organic Food Products: Credence and Price Competition

Yi Wang; Zhanguo Zhu; Feng Chu;
Open Access English
  • Published: 01 Apr 2017
  • Publisher: HAL CCSD
  • Country: France
Abstract
International audience; We analyze the organic and non-organic production choices of two firms by considering customers' trust in organic food products. In the context of customers' possible willingness to pay a premium price and their mistrust in organic food products, two firms first make choices on offering organic and non-organic food products. If offering organic products, a firm can further invest in the credence system to increase customers' trust in their organic products. At the final stage, two firms determine prices. We provide serval insights. First, we characterize the market conditions in which only one firm, both firms or neither firm will choose ...
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free text keywords: Competition, Credence, Organic food products, Sustainability, [INFO.INFO-RO]Computer Science [cs]/Operations Research [cs.RO], Willingness to pay, Commerce, Organic production, Food products, Business, Organic product, Product type, Market conditions, lcsh:Environmental effects of industries and plants, lcsh:TD194-195, lcsh:Renewable energy sources, lcsh:TJ807-830, lcsh:Environmental sciences, lcsh:GE1-350
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