Abstract
<p>Food security incidents have enhanced Chinese consumers’ concerns about food quality and security. These growing concerns have increased demand for security of food and led to development of Chinese food traceability system. Based on the literature review, this paper built a signaling dynamic game model of information delivery from enterprises to consumers to explore the refining Bayes Nash equilibrium. The analytical results show that “good” enterprise need to send enough food traceability information to get themselves separated from “bad” enterprises, while enterprises which were “not that good” had to send much more information to achieve that trust of consumers.</p>
Highlights
Food security has become a global issue concerned by China and overseas countries
The analytical results show that “good” enterprise need to send enough food traceability information to get themselves separated from “bad” enterprises, while enterprises which were “not that good” had to send much more information to achieve that trust of consumers
The way to turn a “lemon market” into a “good” one is discussed and that will contribute the development of food traceability system in China, improve food security level, and cut economic loss of the society
Summary
Food security has become a global issue concerned by China and overseas countries. Ensuring food security became a strategic target of China The nature of this problem is the reverse selection under information asymmetry. As an effective measure to decrease food security risks, food traceability system produces reliable and continuous flow of information on supply chain to monitor food production processes and identify various problems with quality signal transmission mechanism. In this way, the system can solve the problems of information insufficiency and asymmetry in the food market and identify the responsible bodies to ensure food security (Cui et al, 2013). The way to turn a “lemon market” into a “good” one is discussed and that will contribute the development of food traceability system in China, improve food security level, and cut economic loss of the society
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