Intellectual Property Rights and Crop-Improving R&D under Adaptive Destruction
This paper studies how the strength of intellectual property rights (IPRs) affects investments in biological innovations when the value of an innovation is stochastically reduced to zero because of the evolution of pest resistance. We frame the problem as a research and development (R&D) investment game in a duopoly model of sequential innovation. We characterize the incentives to invest in R&D under two competing IPR regimes, which differ in their treatment of the follow-on innovations that become necessary because of pest adaptation. Depending on the magnitude of the R&D cost, ex ante firms might prefer an intellectual property regime with or without a "research exemption" provision. The study of the welfare function that also accounts for benefit spillovers to consumersâ€”which is possible analytically under some parametric conditions, and numerically otherwiseâ€”shows that the ranking of the two IPR regimes depends critically on the extent of the R&D cost.
|Date of creation:||Jun 2007|
|Date of revision:|
|Contact details of provider:|| Postal: 578 Heady Hall, Ames, Iowa 50011-1070|
Phone: (515) 294-1183
Fax: (515) 294-6336
Web page: http://www.card.iastate.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William Brock & Anastasios Xepapadeas, .
"Valuing Biodiversity from an Economic Perspective: AUnified Economic, Ecological and Genetic Approach,"
0301, University of Crete, Department of Economics.
- William A. Brock & Anastasios Xepapadeas, 2003. "Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological, and Genetic Approach," American Economic Review, American Economic Association, vol. 93(5), pages 1597-1614, December.
- Brock,W.A. & Xepapadeas,A., 2003. "Valuing biodiversity from an economic perspective : a unified economic, ecological and genetic approach," Working papers 9, Wisconsin Madison - Social Systems.
- Brock,W. & Xepapadeas,A., 2001. "Valuing biodiversity from an economic perspective : a unified economic, ecological and genetic approach," Working papers 17, Wisconsin Madison - Social Systems.
- William Brock & Anastasios Xepapadeas, 2001. "Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological and Genetic Approach," Working Papers 0102, University of Crete, Department of Economics.
- James Bessen & Eric Maskin, 2009.
"Sequential innovation, patents, and imitation,"
RAND Journal of Economics,
RAND Corporation, vol. 40(4), pages 611-635.
- 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.
- Denicolo, Vincenzo, 1999. "The optimal life of a patent when the timing of innovation is stochastic," International Journal of Industrial Organization, Elsevier, vol. 17(6), pages 827-846, August.
- GianCarlo Moschini, 2003.
"Intellectual Property Rights and the World Trade Organization: Retrospect and Prospects,"
Center for Agricultural and Rural Development (CARD) Publications
03-wp334, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Moschini, GianCarlo, 2004. "Intellectual Property Rights and the World Trade Organization: Retrospect and Prospects," Staff General Research Papers 10442, Iowa State University, Department of Economics.
- Terrance Hurley & Silvia Secchi & Bruce Babcock & Richard Hellmich, 2002.
"Managing the Risk of European Corn Borer Resistance to Bt Corn,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 22(4), pages 537-558, August.
- Hurley, Terrance M. & Secchi, Silvia & Babcock, Bruce A. & Hellmich, Richard L., 2002. "Managing the Risk of European Corn Borer Resistance to Bt Corn," Staff General Research Papers 10294, Iowa State University, Department of Economics.
- Timo Goeschl & Timothy Swanson, 2003. "Pests, Plagues, and Patents," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 561-575, 04/05.
- 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).
- Timo Goeschl & Timothy Swanson, 2003. "On Biology and Technology: The Economics of Managing Biotechnologies," Working Papers 2003.42, Fondazione Eni Enrico Mattei.
When requesting a correction, please mention this item's handle: RePEc:ias:cpaper:07-wp449. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.