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Imperfect competition, functional forms, and the size and distribution of research benefits

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  • Alston, Julian M.
  • Sexton, Richard J.
  • Zhang, Mingxia

Abstract

The effects of functional forms for supply and demand on the size and distribution of the returns to research are examined under a range of forms of competition. Under perfect competition, the choice of functional form is relatively unimportant for the estimation of research benefits. Under imperfect competition, the combination of the choice of functional forms for supply and demand and the nature of the research‐induced supply shift can have profound implications for the results. Functional form plays a much more important role than in the competitive model. The most important contrast is between the constant elasticity model and the linear model (along with various cases of a generalized linear model). These findings are illustrated using a combination of analytical results and numerical simulations.
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  • Alston, Julian M. & Sexton, Richard J. & Zhang, Mingxia, 1999. "Imperfect competition, functional forms, and the size and distribution of research benefits," Agricultural Economics, Blackwell, vol. 21(2), pages 155-172, October.
    • Handle: RePEc:eee:agecon:v:21:y:1999:i:2:p:155-172
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    2. James F. Oehmke & Dave D. Weatherspoon & Christopher A. Wolf & Anwar Naseem & Mywish Maredia & Amie Hightower, 2000. "Is agricultural research still a public good?," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 68-81.
    3. Hareau, Guy Gaston & Mills, Bradford F. & Norton, George W. & Bosch, Darrell J., 2002. "The Economic Impact Of Genetically Modified Organisms In Small Developing Countries," 2002 Annual meeting, July 28-31, Long Beach, CA 19891, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Benjamin Henderson & Lynn Henry & Gordon MacAulay & Jen Tatuh, 2010. "Potential Payoff from R&D in the Coconut Industry of North Sulawesi, Indonesia," Asian Economic Journal, East Asian Economic Association, vol. 24(1), pages 69-85, March.
    5. Sheldon, Ian M., 2017. "The Competitiveness Of Agricultural Product And Input Markets: A Review And Synthesis Of Recent Research," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(1), pages 1-44, February.
    6. Lloyd, Tim A. & Morgan, C. Wyn & McCorriston, Steve & Rayner, Anthony J., 2003. "The Impact Of Food Scares On Price Transmission In Inter-Related Markets," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25904, International Association of Agricultural Economists.

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