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Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products

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Author Info
Harvey E. Lapan
GianCarlo Moschini

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Abstract

A partial-equilibrium, two-country model is developed to analyze implications from the introduction of genetically modified (GM) products. In the model, innovators hold proprietary rights, farmers are (competitive) adopters, some consumers deem GM food to be inferior in quality to traditional food, and the mere introduction of GM crops affects the costs of non-GM food (because of costly identity preservation). Among the results derived, it is shown that, although GM innovations have the potential to improve efficiency, some groups can be made worse off. Indeed, it is even possible that the costs induced by GM innovations outweigh the efficiency gains. Copyright 2004 American Agricultural Economics Association.

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Publisher Info
Article provided by American Agricultural Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 86 (2004)
Issue (Month): 3 (08)
Pages: 634-648
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Handle: RePEc:bla:ajagec:v:86:y:2004:i:3:p:634-648

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law & Economics, University of Chicago Press, vol. 41(2), pages 343-86, October.
  2. Lapan, H. & Moschini, G., 2000. "Incomplete Adoption of a Superior Innovation," Staff General Research Papers 1738, Iowa State University, Department of Economics.
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  3. Bullock, David S. & Desquilbet, Marion & Nitsi, Elisavet, 2000. "The Economics Of Non-Gmo Segregation And Identity Preservation," 2000 Annual meeting, July 30-August 2, Tampa, FL 21845, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
    Other versions:
  4. Golan, Elise & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service. [Downloadable!]
  5. GianCarlo Moschini, 2001. "Economic Benefits and Costs of Biotechnology Innovations in Agriculture," Center for Agricultural and Rural Development (CARD) Publications 01-wp264, Center for Agricultural and Rural Development (CARD) at Iowa State University. [Downloadable!]
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  6. Beales, Howard & Craswell, Richard & Salop, Steven C, 1981. "The Efficient Regulation of Consumer Information," Journal of Law & Economics, University of Chicago Press, vol. 24(3), pages 491-539, December.
  7. Moschini, Giancarlo & Lapan, Harvey & Sobolevsky, Andrei, 2000. "Roundup Ready Soybeans and Welfare Effects in the Soybean Complex," Staff General Research Papers 1799, Iowa State University, Department of Economics.
  8. Moschini, Giancarlo, 2001. "Biotech--Who Wins? Economic Benefits and Costs of Biotechnology Innovations in Agriculture," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 2(1). [Downloadable!]
  9. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August. [Downloadable!] (restricted)
  10. Moschini, GianCarlo & Lapan, Harvey, 2002. "Intellectual Property Rights and the Welfare Effects of Agricultural R & D," Staff General Research Papers 5048, Iowa State University, Department of Economics.
  11. Fischer, Ronald & Serra, Pablo, 2000. "Standards and protection," Journal of International Economics, Elsevier, vol. 52(2), pages 377-400, December. [Downloadable!] (restricted)
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