Agric. Econ. - Czech, 2019, 65(2):74-81 | DOI: 10.17221/102/2018-AGRICECON

Analysing the traceability system in herbal product industry by game theoryOriginal Paper

Mao-Chang Wang^*,1, Chin-Ying Yang²

¹ Department of Accounting, Chinese Culture University, Taipei, Taiwan

² Department of Agronomy, National Chung Hsing University, Taichung, Taiwan

The agricultural traceability system provides information transparency throughout the agricultural supply chain. This paper applies game theory to analyse the traceability system used by the herbal product industry in order to elucidate the strategic choices made by government authorities, farmers (e.g. producers), certification agencies, and consumers. This paper clarifies how relevant variables affect the traceability system employed in the herbal product industry. The analysis yields strong results and indicates a superior equilibrium; the observed strategic choices comprise active traceability system promotion by authorities, development of a comprehensive traceability system by farmers, maintenance of independence by certification agencies, and purchase of herbal products by consumers. The traceability system and existing herbal product safety programs must be refined because they are crucial to consumers, farmers, and people who support agricultural communities. These results contribute to the literature in the field, serving as a reference for members of the herbal product industry, government authorities, and academics.

Keywords: certification agencies; consumers; farmers; game theory; government authorities; herbal product industry; traceability system

Published: February 28, 2019  Show citation