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European Journal of Law and Economics

, Volume 26, Issue 1, pp 27–60 | Cite as

Understanding and managing behavioural risks: the case of malpractice in poultry production

  • Norbert Hirschauer
  • Stefan Zwoll
Article

Abstract

The probability that economic actors break rules increases with the profits they thus expect to earn. It decreases with the probability and level of losses resulting from detection. It also decreases with social factors which shield actors from yielding to economic temptations. This article gives an accentuated description of major schools of thought concerned with economic misconduct. It emphasizes the need for a comprehensive behavioural economic analysis and outlines an analytical framework for this purpose. Understanding material incentives as major, albeit partial drivers of economic behaviour which need to be attacked, we develop a game-theoretic approach for reconstructing the economic incentives of profit-oriented actors. Using the approach to process expert estimates and approximating the incentives of actors in the poultry industries exposes many critical settings where temptations arise to breach production-related standards (crimes against consumers).

Keywords

Asymmetric information Behavioural economic analysis Control theories Economic misconduct Moral hazard Protective factors 

JEL Classifications

A13 K32 K42 

Notes

Acknowledgement

The study of the poultry industry referred to in this article was financially supported by the Federal Ministry of Food, Agriculture and Consumer Protection, Germany.

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Authors and Affiliations

  1. 1.Faculty of Natural Sciences III, Institute of Agricultural and Nutritional Sciences, Farm Management Martin-Luther-University Halle-WittenbergHalle (Saale)Germany
  2. 2.Faculty of Agriculture and Horticulture, Department of Agricultural Economics and Social Sciences, Farm Management GroupHumboldt-Universitaet zu BerlinBerlinGermany

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