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On the Demand for a State-Contingent, Cost-Saving Seed Trait

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Abstract

Biotechnology has enriched the strategy set available to crop managers. Suppose a manager faces a decision between applying a pre-emergence pesticide or applying nothing at all. The advent of pesticide tolerance traits in plants admits the possibility of a state-contingent post-emergence application of pesticide. The innovation adds value in large part because it provides the manager with the option to wait for more information. For heterogeneous acre types, the determinants of trait royalties and of crop management strategies in equilibrium are studied. Pest resistance traits have different implications for crop management. Whereas a tolerance trait likely complements information technologies, the addition of a resistance trait may substitute for them.

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  • David A. Hennessy & Alexander E. Saak, 2002. "On the Demand for a State-Contingent, Cost-Saving Seed Trait," Center for Agricultural and Rural Development (CARD) Publications 02-wp321, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:02-wp321
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