A game-theoretic and institutional anlysis of moral hazards and social dilemmas: the case of behavioural food risks and white-collar crime in agri-food chains

• Applicant: Professor Dr. Norbert Hirschauer
• Subject Area: Agricultural Economics, Agricultural Policy, Agricultural Sociology
• Term: from 2007 to 2010
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 42778996

Malpractice in production entails unacceptable technological procedures and increased risks of adverse outcomes for trading partners and the society. Despite their physical implications, behavioural risk sources in economic relationships are known as moral hazards. They can be seen as social dilemmas originating from negative externalities caused by the breaking of rules designed to prevent them. The probability of malpractice increases with misdirected economic incentives, i.e. the expected profit it is able to produce. It decreases with bonds to norms that prevent producers from giving way to economic temptations. Despite a growing societal awareness, little research has been done on the conditions of ruleabiding and rule-breaking behaviour in food production contexts characterised by asymmetric information and conflicting interests. Consequently, large knowledge gaps persist on decisionmaking processes and on identifying and curbing behavioural food risks. The project aims to assess how a microeconomic empirical analysis of the actors' incentives can be combined with an analysis of institutional environments, thus contributing to the understanding of decisionmaking in food businesses and of the making and changing of institutional environments.

• DFG Programme: Research Grants