Abstract
The dairy value chain in Tunisia has been facing recurrent problems mostly related to coordination, contracting, pricing and quality imperfections. The policy focus on technology generation and dissemination, without considering the underlying problems related to market imperfections and institutional and socio-economic processes, has contributed to low technology adoption and limited development in the dairy value chain. This paper uses a gaming simulation approach to allow breeders to experiment and consider strategies of cooperation which lead to increased returns and improved quality of milk. The game allows understanding the role of trust and cooperation in improving the performance of the dairy value chain. The experiment was done in two regions and in four sessions each. Results show that benefits to breeders are derived from the price of milk which is determined by the number of cooperation in the repeated games strategies. The resulting Nash equilibrium is one where farmers cooperate without cheating. This solution avoids farmers the risk of rejection of milk and results in price increase as a result of the collective cooperative action.
Highlights
Imperfections in the dairy value chain in Tunisia include pricing mechanism, quality measurement and related information asymmetries, and overall market failure as a result of deficiency in coordination and organization
We study the decision making process to examine the behavior of the players and use the output of the game, a pre-questionnaire, and the debriefing of the game to understand the role of trust and cooperation in improving the performance of the dairy value chain
Game theory applications in resolving imperfections in the dairy value chain cover a range of problems in diverse categories and types and allow simulation of the self-centered attitude of the involved players with a fairly realistic manner
Summary
Imperfections in the dairy value chain in Tunisia include pricing mechanism, quality measurement and related information asymmetries, and overall market failure as a result of deficiency in coordination and organization. Tunisia has employed several strategies aiming the development of the dairy sector. These strategies enabled Tunisia to achieve self-sufficiency in milk in 1999. If inappropriate policies are implemented, it can influence the performance of the value chain (Sanz et al, 2015). Among these problems the organization of mar-
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
