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Fungicide Resistance and Misinformation: A Game Theoretic Approach

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Abstract

Fungicide resistance developed by pathogens that grapes are susceptible to is problematic for the industry today. We provide further insight into the strategic behavior of grape growers when their choices of fungicide levels generate a negative intertemporal production externality in the form of fungicide resistance. We find that when growers encounter this type of externality, the noncooperative fungicide level is higher than the socially optimal level. We examine a compensation mechanism designed to ameliorate fungicide resistance and find that it induces the socially optimal level; however, misinformation about the severity of the fungicide resistance generates distortions. The results suggest that the information available to growers about fungicide resistance is essential for its mitigation with the proposed compensation mechanism. In particular, we find that if the misinformed grower considers fungicide resistance to be relatively mild, then it is preferable that the misinformed grower has the compensating role.

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  • Chelsea, Chelsea & Espinola-Arredondo, Ana, 2022. "Fungicide Resistance and Misinformation: A Game Theoretic Approach," Working Papers 2020-4, School of Economic Sciences, Washington State University, revised 06 Feb 2021.
    • Handle: RePEc:ris:wsuwpa:2020_004
    Note: http://ses.wsu.edu/wp-content/uploads/2020/10/WP2020-4.pdf
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    1. Kanjilal, Kiriti & Ahmed, Haseeb, 2021. "Transboundary regulation and management of antibiotics in livestock," 2021 Annual Meeting, August 1-3, Austin, Texas 313889, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Fungicide resistance; game theory; compensation mechanism; intertemporal externality; misinformation;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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