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.”
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pindyck, Robert S., 2000.
"Irreversibilities and the timing of environmental policy,"
Resource and Energy Economics,
Elsevier, vol. 22(3), pages 233-259, July.
- Pindyck, Robert S., 1998. "Irreversibilities and the timing of environmental policy," Working papers WP 4047-98., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Demont, Matty & Wesseler, Justus & Tollens, Eric, 2002.
"Biodiversity Versus Transgenic Sugar Beet: The One Euro Question,"
31859, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
- Eric Tollens, 2004. "Biodiversity versus transgenic sugar beet: the one euro question," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(1), pages 1-18, March.
- Demont, Matty & Wesseler, Justus & Tollens, Eric, 2003. "Biodiversity versus Transgenic Sugar Beet: The One Euro Question," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25831, International Association of Agricultural Economists.
- Soregaroli, Claudio & Wesseler, Justus, 2005. "Minimum Distance Requirements and Liability: Implications for Co-Existence," MPRA Paper 33230, University Library of Munich, Germany.
- Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-12, December.
- Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-54, May-June.
- Arrow, Kenneth J & Fisher, Anthony C, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, MIT Press, vol. 88(2), pages 312-19, May.
- McDonald, Robert & Siegel, Daniel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 707-27, November.
- Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
- Xianlei Ma & Justus Wesseler & Nico Heerink & Futian Qu, 2013. "Land Tenure Reforms and Land Conservation Investments in China ¨C What Does Real Option Value Theory Tell Us?," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 19-33, August.
- Kikulwe, Enoch & Birol, Ekin & Wesseler, Justus & Falck-Zepeda, José, 2009. "A latent class approach to investigating consumer demand for genetically modified staple food in a developing country: The case of GM bananas in Uganda," IFPRI discussion papers 938, International Food Policy Research Institute (IFPRI).
- Wesseler, Justus & Scatasta, Sara, 2009. "Editor’s introduction. the future of agricultural biotechnology: creative destruction, adoption, or irrelevance?–in honor of Prof. Vittorio Santaniello," MPRA Paper 25603, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.