Contact
AAWE
Economics Department
New York University
19 W. 4th Street, 6FL
New York, NY 10012, U.S.A.
Tel: (212) 992-8083
Fax: (212) 995-4186
E-Mail: karl.storchmann@nyu.edu
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.
AAWE
Economics Department
New York University
19 W. 4th Street, 6FL
New York, NY 10012, U.S.A.
Tel: (212) 992-8083
Fax: (212) 995-4186
E-Mail: karl.storchmann@nyu.edu