Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products

dc.contributor.author Lapan, Harvey
dc.contributor.author Lapan, Harvey
dc.contributor.author Moschini, GianCarlo
dc.contributor.author Moschini, Giancarlo
dc.contributor.department Center for Agricultural and Rural Development
dc.date 2018-02-16T13:20:52.000
dc.date.accessioned 2020-06-30T01:03:58Z
dc.date.available 2020-06-30T01:03:58Z
dc.date.embargo 2015-06-15
dc.date.issued 2002-05-01
dc.description.abstract <p>We build a partial-equilibrium, two-country model to analyze some implications of the introduction of genetically modified (GM) products. In the model, innovators hold proprietary rights on the new technology, whereas farmers are (competitive) adopters; some consumers deem food produced from GM products to be inferior to traditional food; countries trade both traditional and GM products; countries can adopt regulations (such as mandatory labeling of GM products) that have direct trade implications; and, crucially, the mere introduction of GM crops affects the costs of non-GM food (because it makes it necessary to implement costly identity preservation). The analysis shows that, although agricultural biotechnology innovations have the potential to improve efficiency, some agents (consumers and/or producers that adopt the innovation) can actually be made worse off by the innovation, and indeed it is even possible that the costs induced by the innovation outweigh the efficiency gains. The study also illustrates the potential for protectionist policies that arise in the context of regulating GM products. In particular, mandatory labeling of GM products (as being implemented by the European Union) is unnecessary, inferior to a system of voluntary labeling, and has costly implications from the perspective of an exporting country that adopts GM products. But this costly labeling policy may actually benefit the importing country that implements the labeling requirement.</p>
dc.identifier archive/lib.dr.iastate.edu/card_workingpapers/327/
dc.identifier.articleid 1325
dc.identifier.contextkey 7219363
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath card_workingpapers/327
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/12662
dc.source.bitstream archive/lib.dr.iastate.edu/card_workingpapers/327/02wp302.pdf|||Fri Jan 14 23:36:35 UTC 2022
dc.subject.disciplines Agricultural and Resource Economics
dc.subject.disciplines Agricultural Economics
dc.subject.disciplines Biotechnology
dc.subject.disciplines Economics
dc.subject.keywords biotechnology
dc.subject.keywords food labeling
dc.subject.keywords genetically modified products
dc.subject.keywords identity preservation
dc.subject.keywords innovations
dc.subject.keywords intellectual property rights
dc.subject.keywords international trade
dc.subject.keywords market failure
dc.subject.keywords monopoly
dc.subject.keywords protectionism
dc.subject.keywords regulation
dc.title Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products
dc.type article
dc.type.genre article
dspace.entity.type Publication
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relation.isAuthorOfPublication 875efd32-d51f-480d-8d4b-3d87da3f2678
relation.isOrgUnitOfPublication 1a6be5f1-4f64-4e48-bb66-03bbcc25c76d
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