Business & Management Studies

Abstract

In recent years, food safety issues have emerged one after another. Even food firms with good reputation are inevitably exposed to food safety incidents related to them by the media. Hence, how the food regulator can develop a set of food inspection policies meeting the expectations of the society is an extraordinary issue that cannot be ignored. The paper creates an analytical model to examine the food regulator’s inspection policies, taking into account the possible strategic responses of the food firms. The results show that the optimal food inspection policy includes heavily inspecting, moderately inspecting, slightly inspecting, and Laissez faire policy, depending on inspection cost. The food regulator, on behalf of consumers, is supposed to adopt an adequate inspection policy inducing food firms to enhance food quality and ensure food safety.