Wastewater irrigation, unobservable food quality and the efficiency of local food markets
研究污水灌溉导致食品质量不可观察时，本地市场如何通过价格传递质量信号，发现水资源分配影响市场效率，对农业政策制定者有用。
Food irrigated with untreated wastewater is considered low quality because of health hazards that they can produce. When consumers cannot distinguish food qualities, asymmetric information threatens the efficiency of local food markets. We examine in a sequential game whether prices can credibly signal quality when farmers face production constraints due to the allocation of scarce water. Besides inefficient pooling equilibria and separating equilibria with distorted prices, we surprisingly find efficient equilibria with undistorted prices if the water allocation to wastewater irrigated agriculture is large. We conclude that water allocation may have a crucial impact on the functioning of the market