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Strategic Analysis Of Trait Commercialization In Genetically Modified (Gm) Grains: The Case Of Gm Wheat

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  • Huso, Scott R.
  • Wilson, William W.

Abstract

The prospective commercialization of GM traits leads to several strategic questions for agbiotechnology and seed firms. Important issues addressed in this study include the method of trait commercialization by agbiotechnology firms and variety production decisions by seed firms. Specifically, agbiotechnology firms must decide whether to license their traits to seed firms, to purchase a seed firm, or to not license or release their traits. These issues are highly strategic. The purpose of this study was to determine equilibrium strategies of agbiotechnology and seed firms regarding the prospective commercialization of two GM traits. Two game theory models were developed to examine equilibrium strategies in two different scenarios. In the first model, both agbiotechnology firms had commercialization strategies of licensing and not licensing. In the second model, the first moving agbiotechnology firm was allowed to have a strategic option to purchase a seed firm as a commercialization strategy. The second agbiotechnology firm remained with two strategies, licensing and not licensing. These models were applied to the case of Roundup Ready® (RR) and fusarium resistant (FR) HRS wheat, although the general structure of the models could be used to analyze other crops and traits. Studies on trait commercialization and stacking are lacking the public literature. This study uses game theory models to develop likely situations that may occur regarding the prospective commercialization of GM traits.

Suggested Citation

  • Huso, Scott R. & Wilson, William W., 2005. "Strategic Analysis Of Trait Commercialization In Genetically Modified (Gm) Grains: The Case Of Gm Wheat," Agribusiness & Applied Economics Report 23632, North Dakota State University, Department of Agribusiness and Applied Economics.
  • Handle: RePEc:ags:nddaae:23632
    DOI: 10.22004/ag.econ.23632
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    File URL: https://ageconsearch.umn.edu/record/23632/files/aer559.pdf
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    Cited by:

    1. Useche, Pilar & Barham, Bradford L. & Foltz, Jeremy D., 2005. "A Trait Specific Model of GM Crop Adoption among U.S. Corn Farmers in the Upper Midwest," 2005 Annual meeting, July 24-27, Providence, RI 19202, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Wilson, William W. & Huso, Scott R., 2008. "Trait Stacking, Licensing, and Seed Firm Acquisitions on Genetically Modified Grains: A Strategic Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), pages 1-20.

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