The Efficiency Of Internet Of Things, Consumer Risk Perception And Willingness To Pay:Based On Food Safety Perspective

Recently,Chinese Hong Kong, Germany, New Zealand, Australia, the United Kingdom and other countries or regions have started implementing milk powder purchase restrictions to restrain Chinese consumers, while the huge mainland market in China is in the doldrums, which shows how serious the problems of food safety in China to the world. Beside the milk powder, the clenbuterol, waste oil, pot fragrance, plastic noodles, leather milk, cadmium rice and so on have accompanied people’s daily life. The threat to people’s health caused by food safety issues contradict the concept of "people-oriented". The solutions for food safety problems involve multiple aspects:government regulatory mechanisms and regulatory system, the construction of the relevant laws and regulations, the standard of food safety, the detection technology of harmfulness, but the nature of the food safety problems is asymmetric information in food supply chain, seller’s market have information superiority to control buyer’s market. So, the fundamental way to solve the problems of food safety is monitoring the various aspects of the risk informations and reducing market transaction costs. The Internet of Things technology, the revolution in the treatment of microscopic information monitoring, has three characters:comprehensive perception, reliable delivery and intelligent processing, which can solve the problems of asymmetric information. The "Guidance on the Promotion of Orderly and Healthy Development of the Internet of Things "(State Issue [2013] 7), promulgated by the State Council on February 17th 2013, show one of the main tasks of the development of Internet of Things is guaranteeing food safety.This paper discusses the microscopic mechanism that the Internet of Things technologies how to solve food safety issues to explore the way of markets invisible hand working on food safety issues.This article discusses the impact of the Internet of Things technology in three aspects:the supply side of the food market, the demand side of the food market and the game process between them. The Internet of Things would change the behavior decisions of the supply and demand sides in market and trigger market mechanism to solve the food safety issues. The paper analyzes the technical efficiency and the spillover effect of the Internet of Things on the supply side of the food market, the risk perception and the willingness to pay of the consumers on the demand side of the food market and the game equilibrium evolution on interactive market. The main content of this paper is as follows:First, the paper analyzes the technical efficiency and the spillover effect of the Internet of Things on the supply side of the food market after a brief introduction of Things technology in food safety management. The empirical research with Taiyen data found that the technical efficiency, calculated through DEA, Data Envelopment Analysis, of the Internet of Things, and the qualified products rate of enterprise have a positive relationship. For complementing the limitations of sample analysis, this paper analyzes the externalities of the Internet of Things technology through mathematical analysis, and found that the Internet of Things technology in supply chain can induce independent agents to replicate the joint profit maximum and the quality standards of the enterprises leading in the implementation of Internet of Things technology would evolve gradually into industry standards.Second, the paper analyzes the risk perception of the consumers on the demand side of the food market, "perception clues", "preferences", "risk perception", "risk aversion", "risk sensitivity" were considered in consumer survey to analyze the influence of the Internet of Things. After the reliability, validity analysis of the questionnaires, mean analysis and factor analysis found the key factor in risk perception, concentrated in the "toxic perception", followed by "cost-aware ", and finally"function perception". Consumers usually consider the risks of toxic food firstly, then the cost, the effect at last.Third, the paper analyzes consumers’willingness to pay for the additional cost of the Internet of Things technology considering the price elasticity of demand, the heterogeneity of goods. The questionnaires was divided by necessities and luxury goods. After data compilation, the empirical research based on censored regression and quintile regression found that consumers’ willingness to pay show obvious structural features due to the differences of the price elasticity of demand and the differences of consumer income. The willingness to pay of Necessities stronger than luxury goods significantly, and the influence of normative beliefs on the willingness to pay of the luxury goods is greater than necessities. Whether luxury goods or necessities, high-income or low-income, the lack of trust is a strong influence on consumers’ willingness to pay for the additional cost of the Internet of Things technology.Fourth, the paper analyzed the game equilibrium conversion and evolution of food security in the context of Internet of Things technology. This paper simulated the market mechanism of the search attribute, experience and credence attributes of food safety uncertainty by general game analysis, single quality factor game analysis and two-factor game analysis of quality-price with the consideration of the difference of consumer behavior attribute. The analysis of dynamic repeated game found that the Internet of Things may decrease the cost of verification, make the market mechanism achieve optimal results with an endogenous power and reach the equilibrium state of complete information game.The last part summarized conclusions and made policy extension. The empirical study based on the data of enterprises found that Internet of Things optimized the allocation of factors, the relationship between efficiency of the Internet of Things and pass rate of goods is positive, financial support may promote the efficiency. The Internet of Things is beneficial to the enterprise transform the quality of the whole industry chain to industry standards from the perspective of the spillover effect of Internet of Things. Therefore, enterprises are pleased to adopt the Internet of Things while financial support and structure tax cuts to some degree will boost the promoting of Internet of Things efficiency. This paper found that risk perception of consumers still stuck at the stage of toxic risk awareness through consumer survey, Internet of Things may facilitate the perceptions of consumers transform toxic risk awareness to functional risk perception. There are income and elasticity of demand of commodity structural differences in the wiliness of consumers to pay extra price for Internet of Things. People have different willingness to pay for each goods attribute while have no faith in authoritative information on the whole. It is appropriate to implement structural adjustment on the political level: the government need to subsidize the consumption of necessities or subsidize enterprises directly. For high-end products, the reduction of tax should be smaller than low-end products. The structural adjustment by government may stimulate the settlement of food security uncertainty by market mechanism and a virtuous circle mechanism of enterprise competition, enhancements of the risk perception of consumers, increase of the wiliness to pay and reduction of food security uncertainty.The main innovation points of this paper are as follows.First, this paper constructed DEA-tobit Model to test the efficiency of Internet of Things monitoring food safety and its influencing factors based on field research of enterprises and analyzed how to improve the efficiency which provide empirical supports for related research in the future.Second, existing literatures on the wiliness of consumers to pay concentrated mostly on one kind of goods or assumed the attributes are the same which ignored the difference of the commodity price elasticity of demand. This paper divided goods into necessities and high-end products so as to incorporated the heterogeneity of commodity price elasticity of demand into the analysis of wiliness of consumers to pay. Besides, this paper studied the influencing factors and its effect of the wiliness of consumers to pay empirically by truncated and quantile regression to analyze the recognition of consumer on Internet of Things and the change of consumer behavior.