Genetic Contamination of Traditional Products
Cross-pollination can be caused by birds, insects and wind. Genetically modified (GM) seeds are produced each year in a controlled environment to maintain their purity. However, pollen from the GM crop can be transferred to traditional crops. When the GM crop producers are in long-run equilibrium and buy seeds from a monopolistic seed producer, the resulting market equilibrium is identical to that when a seed monopolist produces the GM crop directly. When involuntary genetic contamination occurs, the monopolist eventually loses its advantage and stops its protection of GM seeds. A terminator gene can stop genetic contamination but imposes spillover costs on the traditional producers and reduces their outputs.
|Date of creation:||31 May 2013|
|Date of revision:|
|Publication status:||Published in International Review of Economics and Finance, June 2013, vol. 27 no. 1, pp. 291-297|
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