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Competition with Mandatory Labeling of Genetically Modified Products

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  • Linda A. Toolsema
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    Abstract

    A vertical differentiation model is analyzed to study the placing on the market of genetically modified (GM) products in a context where labeling of such products is mandatory, as it is in the European Union. The model has two stages: firms first choose their technology (either GM or conventional) and then compete. We assume the GM product to have lower marginal cost, and lower value to consumers. We analyze technology choice as well as the effects of introducing the GM product on competitive behavior. In particular, we study implications for output levels, prices, and social welfare. We also discuss contamination of conventional goods.

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    Bibliographic Info

    Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

    Volume (Year): 164 (2008)
    Issue (Month): 3 (September)
    Pages: 429-448

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    Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200809)164:3_429:cwmlog_2.0.tx_2-a

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    Cited by:
    1. Choi, E. Kwan, 2010. "International trade in genetically modified products," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 383-391, June.
    2. Tonsor, Glynn T. & Wolf, Christopher A., 2011. "On mandatory labeling of animal welfare attributes," Food Policy, Elsevier, vol. 36(3), pages 430-437, June.
    3. Choi, E. Kwan, 2013. "Genetic Contamination of Traditional Products," Staff General Research Papers 37369, Iowa State University, Department of Economics.

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