publication . Other literature type . Article . 2005

Regulatory Approval Decisions in the Presence of Market Externalities: The Case of Genetically Modified Wheat

Furtan, William Hartley; Gray, Richard S.; Holzman, J.J.; Furtan, William Hartley; Gray, Richard S.; Holzman, J.J.;
  • Published: 01 Apr 2005
  • Publisher: Unknown
This study examines the optimal approval strategy for genetically modified (GM) wheat varieties in Canada and the United States. Without an affordable segregation system, the introduction of GM wheat will create a market for "lemons" that will result in the loss of important export markets. Using a differentiated product trade model for spring wheat, with endogenous technology pricing, a payoff matrix is generated for the possible approval outcomes. Results show that the existence of the market externality removes the first-mover advantage for wheat producers from the approval of the new GM wheat variety. There are large distributional effects; wheat producers l...
free text keywords: biotechnology, market externalities, non cooperative games, strategic approval decisions, trade, Agricultural and Food Policy,, Agricultural and Food Policy, biotechnology, market externalities, non cooperative games, strategic approval decisions, trade, non-cooperative games, Agriculture, S
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