Risk Governance Mechanism of Food Safety Based on Product Reputation

Abstract

Food matters public daily lives, it is both practically and theoretically imperative to enhance the governance of food safety risks. In this paper, a three-tier supply chain model involving government regulatory authorities, food producers and customers is established for designing a risk governance mechanism of food safety based on a reputation updating model. Meanwhile, the study also explores the influence of reputation on product quality and sales price for food producers, as well as the accuracy in testing product quality of government and the effectiveness of governmental regulations. The results show that product price is positively correlated with the reputation, and negatively related the government's rewards and punishments. When the government improves accuracy of food sample testing and enhances rewards and strengthens punishments for food producers, product quality can be effectively controlled, sales prices can be balanced, and producer’s profits can be improved. Finally, this paper provides insight on the risk governance of food safety through many observations. It is found that a relatively slow process for producers to improve company reputation by improving its product quality, but issues with food quality and safety afford a devastating blow to the company reputation once this information is released.