The Biotechnology Sector: "Bounds" to Market Structure
AbstractThis paper examines whether it makes sense to consider Sutton's "bounds" approach as a candidate theory for explaining the recent evolution of market structure in the biotechnology sector, and to speculate whether market structure will change if the industry begins to introduce second-generation GM products that are of more direct benefit to consumers. A key result is that the market structure is bounded in the presence of endogenous sunk costs, implying care should be taken when inferring any correlation between R&D expenditure and seller concentration in the biotechnology sector.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6078.
Date of creation: 2008
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Biotechnology; market structure; Research and Development/Tech Change/Emerging Technologies; L1; L11;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-COM-2008-11-18 (Industrial Competition)
- NEP-IND-2008-11-18 (Industrial Organization)
- NEP-MIC-2008-11-18 (Microeconomics)
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.:
- Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057 Elsevier.
- Marco, Alan C. & Rausser, Gordon C., 2007.
"The Role of Patent Rights in Mergers: Consolidation in Plant Biotechnology,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
qt2dk2x9hm, Department of Agricultural & Resource Economics, UC Berkeley.
- Alan C. Marco & Gordon C. Rausser, 2008. "The Role of Patent Rights in Mergers: Consolidation in Plant Biotechnology," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 133-151.
- Marco, Alan C. & Rausser, Gordon C., 2007. "The role of patent rights in mergers : consolidation in plant biotechnology," CUDARE Working Paper Series 1036, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Brian Roe & Ian Sheldon, 2007. "Credence Good Labeling: The Efficiency and Distributional Implications of Several Policy Approaches," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 1020-1033.
- Sutton, John, 1996. "Technology and market structure," European Economic Review, Elsevier, vol. 40(3-5), pages 511-530, April.
- Lavoie, Brian F. & Sheldon, Ian M., 2000. "The Source Of Comparative Advantage In The Biotechnology Industry: A Real Options Approach," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C. 26019, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
- Graff, Gregory D. & Rausser, Gordon C. & Small, Arthur Adams, 2001.
"Agricultural biotechnology's complementary intellectual assets,"
CUDARE Working Paper Series
925, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Gregory D. Graff & Gordon C. Rausser & Arthur A. Small, 2003. "Agricultural Biotechnology's Complementary Intellectual Assets," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 349-363, May.
- Armen A. Alchian, 1950. "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy, University of Chicago Press, vol. 58, pages 211.
- Shaked, Avner & Sutton, John, 1982. "Relaxing Price Competition through Product Differentiation," Review of Economic Studies, Wiley Blackwell, vol. 49(1), pages 3-13, January.
- Perloff,Jeffrey M. & Karp,Larry S. & Golan,Amos, 2007.
"Estimating Market Power and Strategies,"
Cambridge University Press, number 9780521804400, November.
- Shaked, Avner & Sutton, John, 1983. "Natural Oligopolies," Econometrica, Econometric Society, vol. 51(5), pages 1469-83, September.
- Schmalensee, Richard, 1989.
"Inter-industry studies of structure and performance,"
Handbook of Industrial Organization,
in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 16, pages 951-1009
- Schmalensee, Richard., 1987. "Inter-industry studies of structure and performance," Working papers 1874-87., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Ian M. Sheldon, 2002. "Regulation of biotechnology: will we ever 'freely' trade GMOs?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(1), pages 155-176, March.
- Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-93, June.
- Dietmar Harhoff & Pierre Régibeau & Katharine Rockett, 2001. "Some simple economics of GM food," Economic Policy, CEPR & CES & MSH, vol. 16(33), pages 263-299, October.
- Schwartz, Marius, 1986. "The Nature and Scope of Contestability Theory," Oxford Economic Papers, Oxford University Press, vol. 38(0), pages 37-57, Suppl. No.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Ian Sheldon & Richard Sperling, 2003. "Estimating the Extent of Imperfect Competition in the Food Industry: What Have We Learned?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 89-109.
- Nolan, Elizabeth & Santos, Paulo, 2009. "Evidence for increasing concentration in plant breeding industries in the United States and the European Union," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 48060, Australian Agricultural and Resource Economics Society.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.