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Incentives to Reduce Crop Trait Durability

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Author Info
Stefan Ambec
Corinne Langinier
Stéphane Lemarié

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Abstract

To reduce the competition from farmers who self-produce seed, an inbred line seed producer can switch to nondurable hybrid seed. In a two-period framework, we first investigate the impact of crop durability on self-production, pricing and switching decisions. Second, we study how the introduction of a fee paid by self-producing farmers affects those decisions. We find that the monopolist may produce technologically dominated hybrid seed in order to extract more surplus from farmers. Further, the introduction of a self-production fee improves efficiency. Copyright ©2007 American Agricultural Economics Association.

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

Volume (Year): 90 (2008)
Issue (Month): 2 (05)
Pages: 379-391
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Handle: RePEc:bla:ajagec:v:90:y:2008:i:2:p:379-391

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  1. Sergio H. Lence & Dermot J. Hayes & Alan McCunn & Stephen Smith & William S. Niebur, 2005. "Welfare Impacts of Intellectual Property Protection in the Seed Industry," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(4), pages 951-968, November. [Downloadable!] (restricted)
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  2. Richard K. Perrin & Lilyan E. Fulginiti, 2005. "Dynamic pricing of Genetically Modified Crop Traits," Industrial Organization 0501005, EconWPA. [Downloadable!]
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  3. Bulow, Jeremy, 1986. "An Economic Theory of Planned Obsolescence," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 729-49, November. [Downloadable!] (restricted)
  4. Bulow, Jeremy I, 1982. "Durable-Goods Monopolists," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 314-32, April. [Downloadable!] (restricted)
  5. Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law & Economics, University of Chicago Press, vol. 15(1), pages 143-49, April.
  6. Alston, Julian M. & Venner, Raymond J., 2002. "The effects of the US Plant Variety Protection Act on wheat genetic improvement," Research Policy, Elsevier, vol. 31(4), pages 527-542, May. [Downloadable!] (restricted)
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  7. Gul, Faruk & Sonnenschein, Hugo & Wilson, Robert, 1986. "Foundations of dynamic monopoly and the coase conjecture," Journal of Economic Theory, Elsevier, vol. 39(1), pages 155-190, June. [Downloadable!] (restricted)
  8. Michael Waldman, 1996. "Planned Obsolescence and the R&D Decision," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 583-595, Autumn. [Downloadable!] (restricted)
  9. Michael Waldman, 2003. "Durable Goods Theory for Real World Markets," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 131-154, Winter. [Downloadable!] (restricted)
  10. Diana M. Burton & H. Alan Love & Gokhan Ozertan & Curtis R. Taylor, 2005. "Property Rights Protection of Biotechnology Innovations," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 14(4), pages 779-812, December. [Downloadable!] (restricted)
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  1. Khachaturyan, Marianna & Yiannaka, Amalia, 2006. "The Market Acceptance and Welfare Impacts of Genetic Use Restriction Technologies (GURTs)," 2006 Annual meeting, July 23-26, Long Beach, CA 21329, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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