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Innovation on the seed market : the role of IPRs and commercialisation rules

Author

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  • Adrien Hervouet

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

  • Marc Baudry

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article deals with the impact of legislation in the seed sector on incentives for variety creation. The first category of rules consists in intellectual property rights and is intended to address a problem of sequential innovation and R&D investments. The second category concerns commercial rules that are intended to correct a problem of adverse selection. We propose a dynamic model of market equilibrium with vertical product differentiation that enables us to take into account the economic consequences of imposing either Plant Breeders' Rights (PBRs) or patents as IPRs and either compulsory registration or minimum standards as commercialisation rules. The main result is that the combination of minimum standards and PBRs (patents) provides higher incentives for sequential and initial innovation and may be preferred by a public regulator when sunk investment costs are low (high) and the probability of R&D success is sufficiently high (low).

Suggested Citation

  • Adrien Hervouet & Marc Baudry, 2014. "Innovation on the seed market : the role of IPRs and commercialisation rules," Working Papers hal-01060565, HAL.
    • Handle: RePEc:hal:wpaper:hal-01060565
    Note: View the original document on HAL open archive server: https://hal.science/hal-01060565
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    References listed on IDEAS

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    Cited by:

    1. Hervouet, Adrien & Langinier, Corinne, 2018. "Plant Breeders’ Rights, Patents, and Incentives to Innovate," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(1), January.
    2. Richard S. Gray, 2021. "In defense of farmer saved seeds," Review of Agricultural, Food and Environmental Studies, Springer, vol. 102(4), pages 451-460, December.

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    More about this item

    Keywords

    Intellectual Property Rights; Plant Breeders' Rights; Catalogue; Product differentiation; Seed market; Biodiversity; Droits de Propriété Intellectuelle; Certificats d'Obtention Végétale; Différentiation des produits; marché des semences; Biodiversité;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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