Asymmetric information in cattle auctions: the problem of revaccinations |
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Authors: | Athanasios G Chymis Harvey S James Jr Srinivasa Konduru Vern L Pierce Robert L Larson |
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Institution: | Department of Agricultural Economics, University of Missouri, Columbia, MO 65211;College of Veterinary Medicine, University of Missouri, Columbia, MO 65211;College of Veterinary Medicine, Kansas State University Manhattan, KS 66506 |
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Abstract: | We analyze the problem of asymmetric information between buyers and sellers in cattle auctions, using the problem of revaccinations as the point of departure. We present a simple model to show that if buyers do not know and cannot verify whether sellers have vaccinated their animals, then they may consider revaccination. Revaccination is only a part of the broader problem of information asymmetry that includes other quality issues and costs that can be saved, thereby affecting the welfare of both buyers and sellers. We consider structural characteristics of ranching, traditions, and consumers' preferences as well as proposals regarding third‐party certification to argue that the problem of asymmetric information in cattle auctions is a persistent one. We also argue for a comprehensive empirical study of the incidence and impacts of buyer revaccination. |
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Keywords: | Q13 Q18 |
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