Abstract Beef is a highly protected commodity in Japan and the number of studies on the impact of beef import tariff reduction has increased in light of the controversy over the Trans-Pacific Partnership Agreement (TPPA), in which the gains from freer trade in beef was a major point of discussion. We estimate that an 11% tariff reduction for Japanese imports of both Australian and U.S. beef can generate a net welfare gain to Japan of between US$92 million and US$915 million. These results are not overly sensitive to whether beef is treated as homogeneous or heterogeneous. A more significant determinant of welfare gains is the extent to which farm policy would be decoupled along with tariff reductions. Under a decoupled farm program, producer welfare can remain unchanged while the net gain from freer trade is identical to that of complete removal of price supports with no compensation to producers. Therefore, negotiators for U.S. and Australian beef interests should lobby for both lowered tariffs and a decoupling of domestic farm policy within the importing country. This seems to have been the case as Japan was willing to move toward a more decoupled farm program under the TPPA.
{"title":"Japanese Beef Tariffs: Beef Quality, Farm Programs, and Producer Compensation","authors":"A. Schmitz, J. Seale, Claudine Chegini","doi":"10.1515/jafio-2019-0001","DOIUrl":"https://doi.org/10.1515/jafio-2019-0001","url":null,"abstract":"Abstract Beef is a highly protected commodity in Japan and the number of studies on the impact of beef import tariff reduction has increased in light of the controversy over the Trans-Pacific Partnership Agreement (TPPA), in which the gains from freer trade in beef was a major point of discussion. We estimate that an 11% tariff reduction for Japanese imports of both Australian and U.S. beef can generate a net welfare gain to Japan of between US$92 million and US$915 million. These results are not overly sensitive to whether beef is treated as homogeneous or heterogeneous. A more significant determinant of welfare gains is the extent to which farm policy would be decoupled along with tariff reductions. Under a decoupled farm program, producer welfare can remain unchanged while the net gain from freer trade is identical to that of complete removal of price supports with no compensation to producers. Therefore, negotiators for U.S. and Australian beef interests should lobby for both lowered tariffs and a decoupling of domestic farm policy within the importing country. This seems to have been the case as Japan was willing to move toward a more decoupled farm program under the TPPA.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2019-0001","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66825987","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This article provides a conceptual framework to understand benefits and costs of private minimum quality standards, increasing seller reputation or warranties when there is a collective reputation for online platforms. Our framework uses a dual reputation model where consumers have a quality expectation based on the reputation of the platform and the reputation of the seller. We also analyze the benefits and costs of various types of fees associated with online platforms and find that the optimal fee structure depends on whether quality concerns or market power concerns are greater. Fees that are fixed, or only depend on quantity, increase market power, but do not hurt product quality. Therefore, they should be used if collective reputation is the main concern. Fees that depend on prices exacerbate bad quality incentives for firms, so they should only be considered if quality is not a concern for consumers. The optimal quality standard depends on the fee structure, as well as the level of compliance to that standard.
{"title":"Collective Reputation and Quality in Online Platforms","authors":"Jason A. Winfree, J. McCluskey","doi":"10.1515/JAFIO-2018-0014","DOIUrl":"https://doi.org/10.1515/JAFIO-2018-0014","url":null,"abstract":"Abstract This article provides a conceptual framework to understand benefits and costs of private minimum quality standards, increasing seller reputation or warranties when there is a collective reputation for online platforms. Our framework uses a dual reputation model where consumers have a quality expectation based on the reputation of the platform and the reputation of the seller. We also analyze the benefits and costs of various types of fees associated with online platforms and find that the optimal fee structure depends on whether quality concerns or market power concerns are greater. Fees that are fixed, or only depend on quantity, increase market power, but do not hurt product quality. Therefore, they should be used if collective reputation is the main concern. Fees that depend on prices exacerbate bad quality incentives for firms, so they should only be considered if quality is not a concern for consumers. The optimal quality standard depends on the fee structure, as well as the level of compliance to that standard.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/JAFIO-2018-0014","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49039025","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this paper is to explore Crowdfunding as a new form of Open Innovation for SMEs and family business in the Agri-Food sector which usually do not have the same skills and tools to operate with conventional own Crowdsourcing methods. The study first has analyzed the principal literature and data available on Crowdfunding and the Food industry in order to describe the state of the art in this subject. Afterwards the focus of the paper goes to the analysis of the Italian case. The study used a deep qualitative approach because of an important lack of data and information on this subject. Nine depth interviews to key informants of the sector have been carried out investigating the market players, the normative regulations, the businesses models and the evolution of Crowdfunding for the Agri-Food industry in Italy. The research finds that Crowdfunding for Agri-Food industry can be important for both its profitability and the development of the sector, but that nowadays the Italian market is still in its primordial phase. Crowdfunding is very suitable for SMEs business which represents the vast majority of the Agri-Food Italian market and the use of this instrument could be beneficial for it.
{"title":"Not Just for Money. Crowdfunding a New Tool of Open Innovation to Support the Agro-Food Sector. Evidences on the Italian Market","authors":"Pronti Andrea, Pagliarino Elena","doi":"10.1515/JAFIO-2017-0016","DOIUrl":"https://doi.org/10.1515/JAFIO-2017-0016","url":null,"abstract":"The aim of this paper is to explore Crowdfunding as a new form of Open Innovation for SMEs and family business in the Agri-Food sector which usually do not have the same skills and tools to operate with conventional own Crowdsourcing methods. The study first has analyzed the principal literature and data available on Crowdfunding and the Food industry in order to describe the state of the art in this subject. Afterwards the focus of the paper goes to the analysis of the Italian case. The study used a deep qualitative approach because of an important lack of data and information on this subject. Nine depth interviews to key informants of the sector have been carried out investigating the market players, the normative regulations, the businesses models and the evolution of Crowdfunding for the Agri-Food industry in Italy. The research finds that Crowdfunding for Agri-Food industry can be important for both its profitability and the development of the sector, but that nowadays the Italian market is still in its primordial phase. Crowdfunding is very suitable for SMEs business which represents the vast majority of the Agri-Food Italian market and the use of this instrument could be beneficial for it.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-01-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/JAFIO-2017-0016","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66825801","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Consistent with preferences for other food products, consumers increasingly care about a range of search and credence seafood characteristics such as: environmental effects and product form. This study utilized a dataset obtained from an online survey, and a Multivariate Ordered Probit formulation to examine the impact of: demographic characteristics, lifestyle preferences, and seafood consumption frequency on preferences for selected seafood attributes. The findings indicate that the factors influencing consumer preferences differ across the attributes examined. Although some demographic variables have a statistically significant effect on consumers’ preferences for seafood attributes other than price, their predictive power was limited regarding preferences for wild-caught, fresh seafood and the impact of sustainability on purchasing decisions. Furthermore, consumers who utilize direct marketing outlets have stronger preferences towards fresh and wild-caught seafood products.
{"title":"What Factors Influence Consumer Preferences for Search and Credence Seafood Characteristics? an Empirical Analysis in Kentucky and South Carolina","authors":"English Ratliff, M. Vassalos, Wuyang Hu","doi":"10.1515/JAFIO-2018-0012","DOIUrl":"https://doi.org/10.1515/JAFIO-2018-0012","url":null,"abstract":"Abstract Consistent with preferences for other food products, consumers increasingly care about a range of search and credence seafood characteristics such as: environmental effects and product form. This study utilized a dataset obtained from an online survey, and a Multivariate Ordered Probit formulation to examine the impact of: demographic characteristics, lifestyle preferences, and seafood consumption frequency on preferences for selected seafood attributes. The findings indicate that the factors influencing consumer preferences differ across the attributes examined. Although some demographic variables have a statistically significant effect on consumers’ preferences for seafood attributes other than price, their predictive power was limited regarding preferences for wild-caught, fresh seafood and the impact of sustainability on purchasing decisions. Furthermore, consumers who utilize direct marketing outlets have stronger preferences towards fresh and wild-caught seafood products.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/JAFIO-2018-0012","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44569788","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper explores the WIC infant formula rebate program, which awards a single-source contract to the firm that offers the lowest net bid price. We study spillover mechanisms derived from instances when an infant formula manufacturer displaces another as a WIC supplier. The analysis compares three types of product segments: infant formula (where WIC is the main player), non-WIC infant formula, and toddler formula. We find that, immediately after the contract displacement, there is a significant increase in market share for all three types of formula for the winning manufacturer and that this effect increases overtime. These market share effects are likely explained by greater shelf space, better product placement, and the advantages of carrying WIC labels, as well as by a combined impact of recommendations from physicians and WIC participants. More interestingly, we observe that winning manufacturers increase the price of WIC and non-WIC infant formula over time. Back-of-the-envelope calculations show that the profit that the WIC-contract manufacturer derives from these spillovers in other product segments more than dominates the losses associated to selling the WIC product below cost. We also discuss the implications that the spillover effects have on displaced (former WIC) manufacturers.
{"title":"Spillover Mechanisms in the WIC Infant Formula Rebate Program","authors":"C. Rojas, Hongli Wei","doi":"10.1515/jafio-2018-0019","DOIUrl":"https://doi.org/10.1515/jafio-2018-0019","url":null,"abstract":"Abstract This paper explores the WIC infant formula rebate program, which awards a single-source contract to the firm that offers the lowest net bid price. We study spillover mechanisms derived from instances when an infant formula manufacturer displaces another as a WIC supplier. The analysis compares three types of product segments: infant formula (where WIC is the main player), non-WIC infant formula, and toddler formula. We find that, immediately after the contract displacement, there is a significant increase in market share for all three types of formula for the winning manufacturer and that this effect increases overtime. These market share effects are likely explained by greater shelf space, better product placement, and the advantages of carrying WIC labels, as well as by a combined impact of recommendations from physicians and WIC participants. More interestingly, we observe that winning manufacturers increase the price of WIC and non-WIC infant formula over time. Back-of-the-envelope calculations show that the profit that the WIC-contract manufacturer derives from these spillovers in other product segments more than dominates the losses associated to selling the WIC product below cost. We also discuss the implications that the spillover effects have on displaced (former WIC) manufacturers.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2018-0019","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44560821","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Fish sustainability raises many questions regarding the impact of both generic information and ecolabels on citizens’ consumption. An experiment was conducted in France to evaluate the impact of different types of information on participants’ WTP for canned fish. For starting the experiment, participants bid for canned tuna and sardines, sold without any quality labels. Explanatory messages on health and sustainability were delivered by balancing positive and negative information, and varying the order of information across subgroups. It is shown that only negative descriptions, including the ones on sustainability, lead to significant reductions in WTP for both tuna and sardines. In the second part of the experiment, participants received a new set of canned tuna, with or without quality labels. We observe a significantly higher WTP for canned tuna sold with the Marine Stewardship Council (MSC) label compared to the WTP for canned tuna sold without any label. This positive premium for such a label indicating the fish sustainability differs from results in the first part of the experiment, in which, for sardines, the only significant message leads to a reduction in WTP, even if sardines are relatively healthy and sustainable.
{"title":"The Ambiguous Impact of Information Related to Fish Sustainability","authors":"S. Marette","doi":"10.1515/jafio-2018-0006","DOIUrl":"https://doi.org/10.1515/jafio-2018-0006","url":null,"abstract":"Abstract Fish sustainability raises many questions regarding the impact of both generic information and ecolabels on citizens’ consumption. An experiment was conducted in France to evaluate the impact of different types of information on participants’ WTP for canned fish. For starting the experiment, participants bid for canned tuna and sardines, sold without any quality labels. Explanatory messages on health and sustainability were delivered by balancing positive and negative information, and varying the order of information across subgroups. It is shown that only negative descriptions, including the ones on sustainability, lead to significant reductions in WTP for both tuna and sardines. In the second part of the experiment, participants received a new set of canned tuna, with or without quality labels. We observe a significantly higher WTP for canned tuna sold with the Marine Stewardship Council (MSC) label compared to the WTP for canned tuna sold without any label. This positive premium for such a label indicating the fish sustainability differs from results in the first part of the experiment, in which, for sardines, the only significant message leads to a reduction in WTP, even if sardines are relatively healthy and sustainable.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2018-0006","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44783181","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Organic and healthy products are becoming more prevalent in markets worldwide, but limited research investigates how consumers choose among these products. This article considers relationships among price, product quality, assortment, and staff service that might affect consumer product choices, as well as a moderating role of macroeconomic conditions. The most important drivers of a choice of organic over healthy products are assortment and service. This study also reveals a distinction between organic and healthy products resulting from the interaction of marketing variables with macroeconomic contexts, such that crisis periods can prompt the cannibalization of healthy products by organic products.
{"title":"Choosing Organic and Healthy Food in Times of Economic Uncertainty: Evidence from Panel Data Analysis in France","authors":"Houcine Akrout, Joseph Kaswengi","doi":"10.1515/jafio-2017-0027","DOIUrl":"https://doi.org/10.1515/jafio-2017-0027","url":null,"abstract":"Abstract Organic and healthy products are becoming more prevalent in markets worldwide, but limited research investigates how consumers choose among these products. This article considers relationships among price, product quality, assortment, and staff service that might affect consumer product choices, as well as a moderating role of macroeconomic conditions. The most important drivers of a choice of organic over healthy products are assortment and service. This study also reveals a distinction between organic and healthy products resulting from the interaction of marketing variables with macroeconomic contexts, such that crisis periods can prompt the cannibalization of healthy products by organic products.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2017-0027","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42854323","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract In the last two decades the Italian food retail industry has changed considerably also thanks to the liberalization process started with the 1998 retail regulation reform. In this study, we investigate the impact of such reform on the food and beverage consumer price index, controlling for the endogenous nature of the policy adoption across regions, and addressing what changes in food retail structure may have driven those effects. We find that the policy had a mitigating effect on food prices, which can be explained by the change in the number and composition of food stores operating in the Italian market, rather than by the changes in store size and in-store services. We find the policy effects not to be statistically different across regions characterized by different levels of liberalization.
{"title":"Food Retail Liberalization, Food Retail Structure and Food Prices: The Italian Case","authors":"Elena Castellari, A. Bonanno, P. Sckokai","doi":"10.1515/jafio-2017-0029","DOIUrl":"https://doi.org/10.1515/jafio-2017-0029","url":null,"abstract":"Abstract In the last two decades the Italian food retail industry has changed considerably also thanks to the liberalization process started with the 1998 retail regulation reform. In this study, we investigate the impact of such reform on the food and beverage consumer price index, controlling for the endogenous nature of the policy adoption across regions, and addressing what changes in food retail structure may have driven those effects. We find that the policy had a mitigating effect on food prices, which can be explained by the change in the number and composition of food stores operating in the Italian market, rather than by the changes in store size and in-store services. We find the policy effects not to be statistically different across regions characterized by different levels of liberalization.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-08-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2017-0029","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48657751","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract We evaluate the impact of different types of information on participants' willingness-to-pay (WTP) and quantity choices for both beef and soy burger meat. To this end, we conducted a lab experiment to elicit WTP with multiple-price lists and chosen quantities of two products in a basket. Participants were provided with explanatory messages regarding the impact of beef and soy on health and environment before successive rounds of WTP determinations and quantity choices. Results show a weak impact of successive rounds of messages on WTP for both beef and soy, while leading to higher relative variations for chosen quantities. These relative changes in both WTP and quantities are then combined for computing the value of information. Results show a relatively low value of information compared to the expenditure for beef. In the last section of the paper we evaluate the effect of the introduction of a beef burger labeled “Fed without GMO” on WTP and quantity choices. Results underline a weak impact of “Fed without GMO” label on changing participants' preferences.
{"title":"The Impact of Information on Willingness to Pay and Quantity Choices for Meat and Meat Substitute","authors":"Elena Castellari, S. Marette, D. Moro, P. Sckokai","doi":"10.1515/jafio-2017-0028","DOIUrl":"https://doi.org/10.1515/jafio-2017-0028","url":null,"abstract":"Abstract We evaluate the impact of different types of information on participants' willingness-to-pay (WTP) and quantity choices for both beef and soy burger meat. To this end, we conducted a lab experiment to elicit WTP with multiple-price lists and chosen quantities of two products in a basket. Participants were provided with explanatory messages regarding the impact of beef and soy on health and environment before successive rounds of WTP determinations and quantity choices. Results show a weak impact of successive rounds of messages on WTP for both beef and soy, while leading to higher relative variations for chosen quantities. These relative changes in both WTP and quantities are then combined for computing the value of information. Results show a relatively low value of information compared to the expenditure for beef. In the last section of the paper we evaluate the effect of the introduction of a beef burger labeled “Fed without GMO” on WTP and quantity choices. Results underline a weak impact of “Fed without GMO” label on changing participants' preferences.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/jafio-2017-0028","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45999399","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract This paper analyzes whether or not a standard reducing risks and influencing firms' entry is protectionist and can be interpreted as an illegitimate non-tariff measure (NTM). Domestic and foreign firms compete in selling products in the domestic market, in the presence of possible damages and endogenous sunk costs for reducing the risks of having these damages. A policymaker chooses a standard that is imposed on all firms, but may also impede their ability to enter the domestic market. Welfare can be improved with a legitimate NTM, particularly under relatively high levels of sunk costs and damages, justifying a reduction in the number of firms allowing a higher effort for curbing the expected damage. Protectionism related to an illegitimate NTM occurs when the standard maximizing domestic or foreign welfare is higher than the international standard, maximizing the world (or global) welfare inclusive of all profits and surpluses across countries. The characterization of protectionism is influenced by the domestic or foreign origin of firms, and by the nature of the expected damage incurred at either the production level or the consumption level. Configurations with expected damages related to consumption tend to exhibit more cases of protectionism compared to configurations with expected damages related to production.
{"title":"Illegitimate or Legitimate Non-Tariff Measures","authors":"S. Marette","doi":"10.1515/JAFIO-2018-0004","DOIUrl":"https://doi.org/10.1515/JAFIO-2018-0004","url":null,"abstract":"Abstract This paper analyzes whether or not a standard reducing risks and influencing firms' entry is protectionist and can be interpreted as an illegitimate non-tariff measure (NTM). Domestic and foreign firms compete in selling products in the domestic market, in the presence of possible damages and endogenous sunk costs for reducing the risks of having these damages. A policymaker chooses a standard that is imposed on all firms, but may also impede their ability to enter the domestic market. Welfare can be improved with a legitimate NTM, particularly under relatively high levels of sunk costs and damages, justifying a reduction in the number of firms allowing a higher effort for curbing the expected damage. Protectionism related to an illegitimate NTM occurs when the standard maximizing domestic or foreign welfare is higher than the international standard, maximizing the world (or global) welfare inclusive of all profits and surpluses across countries. The characterization of protectionism is influenced by the domestic or foreign origin of firms, and by the nature of the expected damage incurred at either the production level or the consumption level. Configurations with expected damages related to consumption tend to exhibit more cases of protectionism compared to configurations with expected damages related to production.","PeriodicalId":52541,"journal":{"name":"Journal of Agricultural and Food Industrial Organization","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-07-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1515/JAFIO-2018-0004","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66825980","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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