Asymmetric Information in Cattle Auction: The Problem of Revaccinations

University of Missouri Agricultural Economics Working Paper No. AEWP 2004-5

29 Pages Posted: 23 Jul 2004

See all articles by Athanasios Chymis

Athanasios Chymis

University of Missouri at Columbia

Harvey S. James, Jr.

University of Missouri at Columbia - Division of Applied Social Sciences

Srinivasa Konduru

University of Missouri at Columbia

Vern Pierce

University of Missouri at Columbia

Date Written: July 2004

Abstract

The paper analyzes the problem of asymmetric information between buyers and sellers in cattle auctions. An illustration is made regarding the vaccinations that the animals receive. Buyers do not know and cannot verify if sellers have vaccinated their animals forcing them to consider revaccination. Revaccination is only a part of the broader problem of information asymmetry that includes other quality issues and costs that can be saved, thereby increasing the welfare of both buyers and sellers. Structural characteristics of ranching, traditions and consumers' preferences are taken into account and a wider approach is attempted to explain the persistence of the problem in light of potential institutional solutions. We argue for a comprehensive empirical study of the incidence and impacts of buyer revaccination.

Keywords: Asymmetric information, cattle auctions, market failure

JEL Classification: Q13, Q18

Suggested Citation

Chymis, Athanasios and James, Harvey S. and Konduru, Srini and Pierce, Vern, Asymmetric Information in Cattle Auction: The Problem of Revaccinations (July 2004). University of Missouri Agricultural Economics Working Paper No. AEWP 2004-5, Available at SSRN: https://ssrn.com/abstract=567426 or http://dx.doi.org/10.2139/ssrn.567426

Athanasios Chymis

University of Missouri at Columbia ( email )

Columbia, MO Columbia 65211
United States

Harvey S. James (Contact Author)

University of Missouri at Columbia - Division of Applied Social Sciences ( email )

Columbia, MO
United States
573-884-9682 (Phone)

HOME PAGE: http://https://hsjames2.wordpress.com

Srini Konduru

University of Missouri at Columbia ( email )

Columbia, MO Columbia 65211
United States

Vern Pierce

University of Missouri at Columbia ( email )

Columbia, MO Columbia 65211
United States

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