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Planting Decisions And Uncertain Consumer Acceptance Of Genetically Modified Crop Varieties

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  • Saak, Alexander E.
  • Hennessy, David A.

Abstract

There exists much uncertainty about consumer attitudes towards genetically modified foods. If it happens that sufficient (insufficient) acres are planted under non-modified seed to meet post-harvest demand, then a price premium will not (will) emerge for the non-modified varieties. A non-linearity originates in the fact that a price premium may be supported. This non-linearity interacts with the extent of demand uncertainty to determine equilibrium varietal plantings and the probability that post-harvest varietal prices will differ. Also, as planting approaches signals will be received by growers about the nature of demand they will be planting into. We show how the non-linearity affects the order on the types of signals that risk-neutral growers will prefer to receive.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2001 Annual meeting, August 5-8, Chicago, IL with number 20581.

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Date of creation: 2001
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Handle: RePEc:ags:aaea01:20581

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Keywords: Consumer/Household Economics; Crop Production/Industries;

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References

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  1. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-80, January.
  2. Sergio H. Lence & Dermot J. Hayes, 2001. "Response to an Asymmetric Demand for Attributes: An Application to the Market for Genetically Modified Crops," Midwest Agribusiness Trade Research and Information Center (MATRIC) Publications 01-mwp5, Midwest Agribusiness Trade Research and Information Center (MATRIC) at Iowa State University.
  3. Lapan, Harvey E. & Moschini, GianCarlo, 2000. "Incomplete Adoption of a Superior Innovation," Staff General Research Papers 1738, Iowa State University, Department of Economics.
  4. Jonathan Levin & Susan Athey, 2001. "The Value of Information in Monotone Decision Problems," Working Papers 01003, Stanford University, Department of Economics.
  5. Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-12, December.
  6. Fernandez-Cornejo, Jorge & McBride, William D., 2000. "Genetically Engineered Crops For Pest Management In U.S. Agriculture," Agricultural Economics Reports 33931, United States Department of Agriculture, Economic Research Service.
  7. Babcock, Bruce A., 1990. "Value of Weather Information in Market Equilibrium (The)," Staff General Research Papers 10592, Iowa State University, Department of Economics.
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Cited by:
  1. Ambec, Stefan & Langinier, Corinne & Marcoul, Philippe, 2012. "Spatial Efficiency of Genetically Modified and Organic Crops," Working Papers 125232, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
  2. Saak, Alexander E., 2003. "Identity Preservation And False Non-Gmo Labeling In The Food Supply Chain," 2003 Annual meeting, July 27-30, Montreal, Canada 22182, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Ganiere, Pierre & Chern, Wen S. & Hahn, David E., 2004. "Who Are Proponents And Opponents Of Genetically Modified Foods In The United States?," Working Papers 28315, Ohio State University, Department of Agricultural, Environmental and Development Economics.
  4. Toolsema, L., 2005. "Competition with mandatory labeling of genetically modified products," Research Report 05F12, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  5. Durbach, Ian, 2009. "On the estimation of a satisficing model of choice using stochastic multicriteria acceptability analysis," Omega, Elsevier, vol. 37(3), pages 497-509, June.
  6. John C. Bernard & John D. Pesek, Jr. & Chunbo Fan, 2004. "Delaware farmers' adoption of GE soybeans in a time of uncertain U.S. adoption," Agribusiness, John Wiley & Sons, Ltd., vol. 20(1), pages 81-94.
  7. Toolsema, Linda, 2005. "Competition with mandatory labeling of genetically modified products," Research Report 05C12, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  8. Ganiere, Pierre & Chern, Wen S., 2004. "Consumer Acceptance Of Genetically Modified Foods: A Profile Of American Consumers," 2004 Annual meeting, August 1-4, Denver, CO 19972, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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