Sourcing for traceability in food supply chain considering consumers' willingness to pay.

The frequent occurrence of food safety incidents is not only to be hazardous to the health of consumers, but also impacts the market of food consumption. Integrating the consumers' willingness to pay for traceability and the difference between suppliers' traceability, this paper provides four sourcing strategies for the retailer. Then, we investigate the sourcing decision of the retailer considering consumers' willingness to pay for traceability, the portion of consumers with traceability consciousness, probability of food safety incident, and additional penalty incurred by food safety incident. We find that increasing consumers' willingness to pay for traceability or expanding the portion of consumers with traceability consciousness may incur unintended consequence, such as an increase in sourcing quantity of non-traceable food product, while efforts on strengthening inspection and penalizing the retailer always lead to more supply of traceable food in the market. [ABSTRACT FROM AUTHOR]