The Santaniello theorem of irreversible benefits
AbstractIrreversible benefits favor an earlier introduction of GM crops versus a later one. A non-trivial question is if they also weigh more than reversible benefits similar to irreversible costs but in the opposite direction. In this contribution, I will show that indeed irreversible benefits do weigh more than reversible ones and indeed result in an irreversibility effect, albeit a positive one. The problem can be summarized by the following theorem: “Irreversible benefits justify the immediate introduction of transgenic crops, even if future uncertainty about reversible benefits include negative benefits and traditional cost-benefit analysis, and treating all benefits and costs as reversible would reject the introduction.” I call this theorem—in honor of Vittorio Santaniello—the “The Santaniello Theorem of Irreversible Benefits.”
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25602.
Date of creation: Jan 2009
Date of revision:
Publication status: Published in AgBioForum 12.1(2009): pp. 8-13
GMOs; irreversible benefits; real option; uncertainty;
Find related papers by JEL classification:
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
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