Why did U.S. food retailers voluntarily pledge to go cage-free with eggs?
Xiao Dong
What the paper says
I develop a model of provision competition between food retailers to examine one potential economic rationale behind voluntary cage-free egg pledges. I show that competition pushes retailers to a prisoners’ dilemma equilibrium where retailers incur fixed costs to offer both non-cage-free and cage-free eggs to steal or prevent the loss of some basket-shopping consumers. In a dynamic setting, retailers can potentially sustain an equilibrium of higher profits by collectively withholding non-cage-free eggs. I show that changing supply conditions and consumer trends could have led to such an equilibrium with pledges acting as a signal to potentially facilitate tacit coordination.
3 citations
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.32 × 0.4 = 0.13 |
| M · momentum | 0.57 × 0.15 = 0.09 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.