Working Paper, Wirtschafts- und Sozialwissenschaften an der Landwirtschaftlich-Gärtnerischen Fakultät, Humboldt-Universität zu Berlin 76/2006
The probability that actors in economic relationships break rules increases with the profits they thus expect to earn. It decreases with the probability and level of short- and long-term losses resulting from disclosure. It also decreases with the level of social context factors and intrinsic values which shield actors from yielding to economic temptations. This paper assesses the relative merits of various scientific approaches concerned with risks in economic relationships and outlines their contribution to the study of opportunistic rule-breaking. Since the identification of (misdirected) economic incentives faced by firms and individuals represents the starting point for a systematic analysis of opportunism in any field, we also outline a microeconomic approach that systematically provides this crucial information. The approach is applied to the problem of food quality and safety threatened by opportunistic malpractice of food business operators. Its essentials are illustrated through a study which systematically searches for the temptations to break production-related rules in the poultry industries.
asymmetric information control theories economic misconduct game theory moral hazard principal-agent model opportunism protective factors relational risks