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International trade in genetically modified products
International Review of Economics and Finance
  • E. Kwan Choi, Iowa State University
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Publication Version
Submitted Manuscript
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This paper investigates competition between two markets that sell close substitutes: a traditional product and a genetically modified (GM) product. Tightening an import quota on the GM product raises the prices of both goods and hurts consumers. Two scenarios are considered under free trade: Cournot–Nash equilibrium and Stackelberg equilibrium. A Stackelberg type monopolist produces more, and the competitive traditional firms produce less, than in Cournot–Nash equilibrium. In the long run, an import ban on the GM product does not help competitive producers of the genetically modified organism (GMO)-free products but benefits only the landowners in Europe.

NOTICE: this is the author’s version of a work that was accepted for publication in International Review of Economics and Finance. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in International Review of Economics and Finance 19 (2010), doi: 10.1016/j.iref.2009.04.002.

Copyright Owner
Elsevier Inc.
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Citation Information
E. Kwan Choi. "International trade in genetically modified products" International Review of Economics and Finance Vol. 19 Iss. 3 (2010) p. 383 - 391
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