Modelling interdependent participation incentives: dynamics of a voluntary livestock disease control programme

Tong Wang, David A. Hennessy
2014 European Review of Agricultural Economics  
This paper models producers' interdependent incentives to participate in a voluntary livestock disease control program. Under strategic complementarity among participation decisions, after a slow start momentum can build such that market premium for participation and participation rate increase sequentially. Non-participation, partial participation and full participation can all be Nash equilibria while participation cost heterogeneity will dispose the outcome toward incomplete participation.
more » ... te participation. We find plausible conditions under which temporary government subsidies to the least cost-effective producers causes tipping toward full participation. Applying parameters from the literature on Johnes' disease, we illustrate factors that may affect participation. These include cost heterogeneity and program effectiveness.
doi:10.1093/erae/jbt038 fatcat:s3aavujvszd2fpxtq5ew5brfoq