The Effect of Market Structure on Pest Resistance Buildup
In this paper we present a continuous time optimal control analysis of resistance buildup in agricultural chemicals when the supplier is a monopolist. We compare the monopolistic, competitive and socially optimal solutions after establishing the stability of each equilibrium. The central finding is that with a monopolistic supplier, resistance buildup is lower than socially optimal. This directly opposes the standard result in the resistance literature. This implies that policies to manage resistance should vary with the age of the chemical, with no intervention during the lifetime of a patent and an optimal tax once the patent expires.
|Date of creation:||2004|
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- D. Hueth & U. Regev, 1974. "Optimal Agricultural Pest Management with Increasing Pest Resistance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(3), pages 543-552.
- Regev, Uri & Shalit, Haim & Gutierrez, A. P., 1983. "On the optimal allocation of pesticides with increasing resistance: The case of alfalfa weevil," Journal of Environmental Economics and Management, Elsevier, vol. 10(1), pages 86-100, March.