International Trade in Genetically Modified Products
AbstractThis paper investigates competition between two markets that sell close substitutes: a traditional product and a genetically modified (GM) product. Tightening an import quota on the GM product raises the prices of both goods and hurts consumers. Two scenarios are considered under free trade: Cournot-Nash equilibrium and Stackelberg equilibrium. A Stackelberg type monopolist produces more, and the competitive traditional firms produce less, than in Cournot-Nash equilibrium. In the long run, an import ban on the GM product does not help competitive producers of the genetically modified organism (GMO)-free products but benefits only the landowners in Europe.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 31265.
Date of creation: 04 Jun 2010
Date of revision:
Publication status: Published in International Review of Economics and Finance, June 2010, vol. 19 no. 3, pp. 383-391
Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
More information through EDIRC
Gentically modified products; import ban; landowners;
Other versions of this item:
- Choi, E. Kwan, 2010. "International trade in genetically modified products," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 383-391, June.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
This paper has been announced in the following NEP Reports:
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- Choi, E. Kwan, 2007.
"North-South Trade and Income Inequality,"
Staff General Research Papers
12788, Iowa State University, Department of Economics.
- Linda A. Toolsema, 2008. "Competition with Mandatory Labeling of Genetically Modified Products," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(3), pages 429-448, September.
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- Higgins, Richard S & Rubin, Paul H, 1986. "Counterfeit Goods," Journal of Law and Economics, University of Chicago Press, vol. 29(2), pages 211-30, October.
- Dinopoulos, Elias & Livanis, Grigorios & West, Carol, 2010. "Country of Origin Labeling (C.O.O.L.): How cool is it?," International Review of Economics & Finance, Elsevier, vol. 19(4), pages 575-589, October.
- Choi, E. Kwan, 2013. "Genetic Contamination of Traditional Products," Staff General Research Papers 37369, Iowa State University, Department of Economics.
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