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Adverse Selection, Moral Hazard, And Grower Compliance With Bt Corn Refuge

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  • Mitchell, Paul D.
  • Zhu, En (John)
  • Hurley, Terrance M.

Abstract

This paper develops a principal-agent model of farmer compliance with Bt corn refuge requirements intended to manage the evolution of resistance to the Bt toxin by insect pests. The model endogenizes the price of the technology, the audit rate, and the fine imposed on non-complying farmers when farmer willingness to pay for Bt corn and compliance effort is private information.

Suggested Citation

  • Mitchell, Paul D. & Zhu, En (John) & Hurley, Terrance M., 2004. "Adverse Selection, Moral Hazard, And Grower Compliance With Bt Corn Refuge," 2004 Annual meeting, August 1-4, Denver, CO 20123, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20123
    DOI: 10.22004/ag.econ.20123
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    File URL: https://ageconsearch.umn.edu/record/20123/files/sp04mi08.pdf
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    1. Terrance M. Hurley & Paul D. Mitchell & Marlin E. Rice, 2004. "Risk and the Value of Bt Corn," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 345-358.
    2. Mitchell, Paul D. & Hurley, Terrance M. & Babcock, Bruce A. & Hellmich, Richard L., 2002. "Insuring The Stewardship Of Bt Corn: 'A Carrot' Versus 'A Stick'," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-16, December.
    3. Hurley, Terrance M. & Babcock, Bruce A. & Hellmich, Richard L., 2001. "Bt Corn And Insect Resistance: An Economic Assessment Of Refuges," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-19, July.
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    Cited by:

    1. Dakuan Qiao & Lei Luo & Xingqiang Zheng & Xinhong Fu, 2022. "External Supervision, Face Consciousness, and Pesticide Safety Use: Evidence from Sichuan Province, China," IJERPH, MDPI, vol. 19(12), pages 1-16, June.
    2. Jianqiang Li, 2012. "The Study on Farmers' Cognition and Production Inclination of Organic Vegetable," Journal of Agricultural Science, Canadian Center of Science and Education, vol. 4(6), pages 272-272, April.

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