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Article dans une revue Journal of Agricultural and Food Industrial Organization Année : 2017

The product line strategy of a company selling seed with a licenced GM trait

Résumé

The economic impact of Genetically Modified Organisms (GMOs) depends heavily on the product line supplied by the seed companies. In this paper, we analyze the interlinking between seed product line and license contract signed between the seed company and the upstream agbiotech firm which owns the Genetically Modified (GM) trait. We show that if the farmers are sufficiently heterogeneous, the seed company prefers to price discriminate by supplying both GM and conventional seeds. In those circumstances, despite higher efficiency of the GM seed, the price increase is such that the farmer’s surplus decreases. This loss may even outweigh the aggregate gains of the seed and the agbiotech companies, thereby leading to a total welfare loss.
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Dates et versions

halshs-01547179, version 1 (26-06-2017)

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Stéphane Lemarié, Delia Baghdasaryan, Etienne Campens. The product line strategy of a company selling seed with a licenced GM trait. Journal of Agricultural and Food Industrial Organization, 2017, 15 (1), pp.n.a. ⟨10.1515/jafio-2016-0030⟩. ⟨halshs-01547179⟩
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