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
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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
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