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Competition with Mandatory Labeling of Genetically Modified Products

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  • Linda A. Toolsema

Abstract

A vertical differentiation model is analyzed to study the placing on the market of genetically modified (GM) products in a context where labeling of such products is mandatory, as it is in the European Union. The model has two stages: firms first choose their technology (either GM or conventional) and then compete. We assume the GM product to have lower marginal cost, and lower value to consumers. We analyze technology choice as well as the effects of introducing the GM product on competitive behavior. In particular, we study implications for output levels, prices, and social welfare. We also discuss contamination of conventional goods.

Suggested Citation

  • Linda A. Toolsema, 2008. "Competition with Mandatory Labeling of Genetically Modified Products," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(3), pages 429-448, September.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200809)164:3_429:cwmlog_2.0.tx_2-a
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    References listed on IDEAS

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    Cited by:

    1. E. Kwan Choi, 2011. "Genetic Contamination of Traditional Products," CESifo Working Paper Series 3624, CESifo.
    2. Choi, E. Kwan, 2013. "Genetic contamination of traditional products," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 291-297.
    3. E. Kwan Choi, 2011. "Genetic Contamination of Traditional Products," DEGIT Conference Papers c016_002, DEGIT, Dynamics, Economic Growth, and International Trade.
    4. Choi, E. Kwan, 2010. "International trade in genetically modified products," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 383-391, June.
    5. Tonsor, Glynn T. & Wolf, Christopher A., 2011. "On mandatory labeling of animal welfare attributes," Food Policy, Elsevier, vol. 36(3), pages 430-437, June.

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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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