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The Santaniello theorem of irreversible benefits

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  • Wesseler, Justus

Abstract

Irreversible benefits favor an earlier introduction of GM crops versus a later one. A non-trivial question is if they also weigh more than reversible benefits similar to irreversible costs but in the opposite direction. In this contribution, I will show that indeed irreversible benefits do weigh more than reversible ones and indeed result in an irreversibility effect, albeit a positive one. The problem can be summarized by the following theorem: “Irreversible benefits justify the immediate introduction of transgenic crops, even if future uncertainty about reversible benefits include negative benefits and traditional cost-benefit analysis, and treating all benefits and costs as reversible would reject the introduction.” I call this theorem—in honor of Vittorio Santaniello—the “The Santaniello Theorem of Irreversible Benefits.”

Suggested Citation

  • Wesseler, Justus, 2009. "The Santaniello theorem of irreversible benefits," MPRA Paper 25602, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25602
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    References listed on IDEAS

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    Cited by:

    1. Kikulwe, Enoch & Birol, Ekin & Wesseler, Justus & Falck-Zepeda, José, 2009. "A latent class approach to investigating consumer demand for genetically modified staple food in a developing country: The case of GM bananas in Uganda," IFPRI discussion papers 938, International Food Policy Research Institute (IFPRI).
    2. Erwin, Patrick M. & López-Legentil, Susanna & Schuhmann, Peter W., 2010. "The pharmaceutical value of marine biodiversity for anti-cancer drug discovery," Ecological Economics, Elsevier, vol. 70(2), pages 445-451, December.
    3. Wesseler, Justus & Scatasta, Sara, 2009. "Editor’s introduction. the future of agricultural biotechnology: creative destruction, adoption, or irrelevance?–in honor of Prof. Vittorio Santaniello," MPRA Paper 25603, University Library of Munich, Germany.
    4. Beckmann, Volker & Soregaroli, Claudio & Wesseler, Justus, 2010. "Ex-ante regulation and ex-post liability under uncertainty and irreversibility: governing the coexistence of GM crops," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-33.
    5. Xianlei Ma & Justus Wesseler & Nico Heerink & Futian Qu, 2013. "Land Tenure Reforms and Land Conservation Investments in China ¨C What Does Real Option Value Theory Tell Us?," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 19-33, August.

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    More about this item

    Keywords

    GMOs; irreversible benefits; real option; uncertainty;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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