Biosecurity Incentives, Network Effects, and Entry of a Rapidly Spreading Pest
AbstractProtection against pest invasion is a public good. Yet the nature of private incentives to avoid entry is poorly understood. This work shows that, due to increasing returns or network effects, private actions to avoid entry are strategic complements. This means that compulsory action, at least by a subset of parties, can be an effective policy. Both heterogeneity in biosecurity costs and the effect of private actions on the extent of the invasion threat are shown to have ambiguous effects on the magnitude of welfare loss due to strategic behavior. Communicated leadership by some party is preferred to simultaneous moves, and it may be best if the party with highest biosecurity costs assumes a leadership role.
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Bibliographic InfoPaper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 35016.
Date of creation: 29 Mar 2012
Date of revision:
Publication status: Published in Ecological Economics, December 2008, vol. 68 no. 1-2, pp. 230-239
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
communication; complementarity; increasing returns; infectious disease; invasive species; network economics; public good;
Other versions of this item:
- Hennessy, David A., 2008. "Biosecurity incentives, network effects, and entry of a rapidly spreading pest," Ecological Economics, Elsevier, vol. 68(1-2), pages 230-239, December.
- D6 - Microeconomics - - Welfare Economics
- H4 - Public Economics - - Publicly Provided Goods
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
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