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GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach

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  • Konduru, Srinivasa
  • Kalaitzandonakes, Nicholas G.
  • Magnier, Alexandre

Abstract

Since their commercial introduction in 1996, genetically modified (GM) crops have been quickly adopted world wide, but some GM crops/varieties have not received regulatory approval for use in some importing countries, leading to asynchronicity in regulatory approvals. In this context, the international agricultural trade relied on analytical GMO testing which is a statistical process, along with identity preserved systems to segregate GM and non-GM crops. This led to a situation where measurement uncertainty became an important issue as it can lead to potential holdups at the point of import. In this background, this paper examines the implications of measurement uncertainty associated with GMO testing on the behavior of importers and exporters in a game theoretic framework. The results indicate that relative size of identity preservation costs, testing and rejection costs, the premiums offered in the non- GM markets and measurement uncertainty all have direct impacts on the behavior of importers and exporters.

Suggested Citation

  • Konduru, Srinivasa & Kalaitzandonakes, Nicholas G. & Magnier, Alexandre, 2009. "GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49594, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea09:49594
    DOI: 10.22004/ag.econ.49594
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    1. Andreas Gabriel & Klaus Menrad, 2015. "Cost of Coexistence of GM and Non‐GM Products in the Food Supply Chains of Rapeseed Oil and Maize Starch in Germany," Agribusiness, John Wiley & Sons, Ltd., vol. 31(4), pages 472-490, October.
    2. Gabriel Andreas & Menrad Klaus, 2014. "The Costs of GM and Non-GM Co-existence in Processed Food Systems – Demonstrated for the Cases of the German Supply Chains of Chocolate and Frozen Pizza," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 1-18, January.

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