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The Effect of Market Structure on Pest Resistance Buildup

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  • Alix-Garcia, Jennifer Marie
  • Zilberman, David

Abstract

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.

Suggested Citation

  • Alix-Garcia, Jennifer Marie & Zilberman, David, 2004. "The Effect of Market Structure on Pest Resistance Buildup," 2004 Annual meeting, August 1-4, Denver, CO 20273, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20273
    DOI: 10.22004/ag.econ.20273
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    File URL: https://ageconsearch.umn.edu/record/20273/files/sp04al07.pdf
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    References listed on IDEAS

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    1. 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.
    2. Frisvold, George B. & Agnew, G. Ken & Baker, Paul, 2002. "Biorational Insecticide Adoption And Conventional Insecticide Use: A Simultaneous, Limited Dependent Variable Model," 2002 Annual meeting, July 28-31, Long Beach, CA 19779, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. 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.
    4. Carlson, Gerald A. & Zilberman, David & Miranowski, John, 1993. "Agricultural and Resource Economics," Staff General Research Papers Archive 11104, Iowa State University, Department of Economics.
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    Cited by:

    1. Oleg Yerokhin & GianCarlo Moschini, 2008. "Intellectual Property Rights and Crop-Improving R&D under Adaptive Destruction," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(1), pages 53-72, May.

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