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Brokers as Experts in the French Wine Industry*

Published online by Cambridge University Press:  08 June 2012

M'hand Fares
M'hand Fares
Affiliation:
INRA (AGIR, UMR 1248) andUniversity of Paris 1, Centre INRA de Toulouse, BP 27. 31326 Castanet Tolosan Cedex, email: mfares@toulouse.inra.fr
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Abstract

The increasing industrialization of the wine supply chain is often associated with a greater vertical coordination. Our paper shows that a spot market institutional arrangement like brokerage can still be a relevant coordination mechanism to mitigate the contractual hazards due to quality problems. Indeed, a broker can be viewed as an expert that can help the merchant to monitor the grower's wine quality process. More precisely, if the merchant cannot credibly monitor the wine making process, it is Pareto improving to delegate this task to a broker. (JEL Classification: D82, L80, M12)

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Type
Articles
Information
Journal of Wine Economics , Volume 4 , Issue 2 , Winter 2009 , pp. 152 - 165
Copyright
Copyright © American Association of Wine Economists 2009

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