POT-BELLIES, CATTLE BREEDS AND REVEALING SIGNALS

Believe it or not, there are many interesting economic puzzles at cattle auctions. For example, why does the Holstein breed completely dominate veal sales? And why do other breeds get slaughtered in terms of price when they enter the veal ring? The answer lies in the nature of veal production and the characteristics of the auction which provide the potential for opportunistic behavior. The Holstein's unique pot-belly signal provides a cheap solution to the cheating problem and results in the domination of the Holstein breed at the auction.