The Trilateral Evolutionary Game of Agri-Food Quality in Farmer-Supermarket Direct Purchase: A Simulation Approach

Abstract

The prevalence of opportunistic behaviors in agri-food production and circulation results in frequent quality accidents in emerging economies. Numerous researches have discussed effective countermeasures to this problem, but few of them focus on the effectiveness and stability of quality assurance systems. Owing to the bounded rationality and information asymmetry, the dynamic quality game among producers, marketers, and consumers has significant characteristics of complexity. This paper aims at discussing the farmer-supermarket direct purchase’s contributions to ensure the agri-food quality and analyzing the effectiveness, stability, and key factors of this new industrial organization. Based on the evolutionary game theory, we establish the trilateral-game payoff matrix, build up the replicator dynamic equations, and discuss possible evolutionary stable states. The simulation results show that the evolutionary system converges to desired stability faster, when the high-quality agri-food’s market premium increases and the penalty for violating quality standards increases. Furthermore, when farmers share more high-quality agri-food’s market premiums and marketers compensate more for violating the quality standards than before, the evolutionary system also converges to desired stability faster. Therefore, the quality information tracing technology, farmers and marketers’ fair distribution of profits and risks, and consumers’ capabilities to safeguard their legal rights are the three key factors to maintain the effectiveness and stability of quality assurance systems.