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International trade in genetically modified products

  • Choi, E. Kwan

This 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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File URL: http://www.sciencedirect.com/science/article/B6W4V-4W6XW32-1/2/d5a36df03c3975910f1cc66699fa6bb7
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Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 19 (2010)
Issue (Month): 3 (June)
Pages: 383-391

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Handle: RePEc:eee:reveco:v:19:y:2010:i:3:p:383-391
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

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  1. Long, Ngo Van, 2005. "Outsourcing and technology spillovers," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 297-304.
  2. Linda A. Toolsema, 2008. "Competition with Mandatory Labeling of Genetically Modified Products," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(3), pages 429-448, September.
  3. Higgins, Richard S & Rubin, Paul H, 1986. "Counterfeit Goods," Journal of Law and Economics, University of Chicago Press, vol. 29(2), pages 211-30, October.
  4. Choi, E. Kwan, 2007. "North-South Trade and Income Inequality," Staff General Research Papers 12788, Iowa State University, Department of Economics.
  5. Choi, E. Kwan, 2008. "Factor growth and equalized factor prices," International Review of Economics & Finance, Elsevier, vol. 17(4), pages 517-528, October.
  6. Guillaume P. Gruère & Colin A. Carter & Y. Hossein Farzin, 2008. "What labelling policy for consumer choice? The case of genetically modified food in Canada and Europe," Canadian Journal of Economics, Canadian Economics Association, vol. 41(4), pages 1472-1497, November.
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