Production Risk and the Estimation of Ex Ante Cost Functions

Cost function estimation under production uncertainty is problematic because the relevant cost is conditional on unobservable expected output. If input demand functions are also stochastic, then a nonlinear errors-in-variables model is obtained and standard estimation procedures typically fail to attain consistency. But by exploiting the full implications of the expected profit maximization hypothesis that gives rise to ex-ante cost functions, it is shown that the errors-in-variables problem can be effectively removed, and consistent estimation of the parameters of interest achieved. A Monte Carlo experiment illustrates the advantages of the proposed procedure as well as the pitfalls of other existing estimators.

Competition Issues in the Seed Industry and the Role of Intellectual Property

Research and Development (R&D) and innovation are crucial features of the seed industry. To support large R&D investments by the private sector, strong intellectual property rights, such as patents, are necessary. The exclusivity granted by patents naturally creates market power positions and raises difficult and unresolved competition issues in an antitrust context.�

Pharmaceutical and Industrial Traits in Genetically Modified Crops: Co-Existence with Conventional Agriculture

This paper discusses the implications of using genetically modified crops to biomanufacture pharmaceuticals and industrial compounds from the perspective of their co-existence with conventional agriculture. Such plant-made pharmaceuticals and plant-made industrial products rely on exciting scientific and technological breakthroughs and promise new opportunities for the agricultural sector, but they also entail novel risks. The management of the externalities and of the possible unintended economic effects that arise in this context is critical and poses difficult questions for regulators.

Incentives and Outcomes in a Strategic Setting: The 3-Points-For-A-Win System in Soccer

We exploit a major structural change that has occurred in world soccer to study the impact of incentives on outcomes in a strategic setting. A game-theoretic model is developed that captures some essential strategic elements of soccer vis-à-vis the number of points awarded to a win. The observable implications of the model are tested using a large dataset that spans 30 years and 35 countries. The empirical results support the theoretical model and show that the 3-point system has led to a statistically significant increase in the expected number of goals and a decrease in the fractions of drawn matches.Association football; Nash equilibrium; panel data; strategic incentives; supermodularity; tournaments

Competition Issues in the Seed Industry and the Role of Intellectual Property

Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, L1, L4, O3, Q1,

Flexible Multistage Demand System Based on Indirect Separability, A

The notion of indirect separability is exploited to derive a new multistage demand system. The model allows a consistent parameterization of demand relations at various budgeting stages and it fulfills the requirement of flexibility while satisfying separability globally. Two propositions are derived to characterize flexible and separable functional forms, which lead to the specification of a flexible and separable translog (FAST) demand system. The model is particularly attractive for modeling large complete demand systems and is illustrated with an application to Canadian food demand.

Incentives and Outcomes in a Strategic Setting: The 3-Points-for-a-Win System in Soccer

I exploit a major structural change that has occurred in world soccer to study the impact of incentives on outcomes in a strategic setting. A game-theoretic model is developed that captures some essential strategic elements of soccer vis-à-vis the number of points awarded to a win. The observable implications of the model are tested using a large dataset that spans 30 years and 35 countries. The empirical results support the theoretical model and show that the 3-point system has led to a statistically significant increase in the expected number of goals and a decrease in the fractions of drawn matches

Quality Certification by Geographical Indications, Trademarks and Firm Reputation

 We develop a reputation model to study the concurrent use of trademarks and certification for food products with a regional identity, known as geographical indications (GIs). The model extends Shapiro’s (1983) approach to modeling reputation to a situation in which two technologies for the production of quality are available, one of which is available only in the GI region and has a cost advantage for the production of higher quality levels. In this setting, trademarks capture firm-specific reputations whereas GI certification captures a notion of collective reputation. The model shows that GI certification improves the ability of reputation to operate as a mechanism for assuring quality when it is linked to some inherent attributes of a particular production area. We discuss some welfare implications of introducing GI certification and show that an EU-style sui generis GI certification is preferable to the US-style approach based on certification marks. asymmetric information; certification; geographical indications; reputation; quality; trademarks.

To Label or Not to Label, That is the Question

Genetically modified organisms (GMOs) have been welcomed by US agriculture and by a number of other countries (notably Canada and Argentina). Transgenic crops were virtually unkn own before 1996 but have experienced breathtaking adoption rates. For example, in 1999 more than 50 percent of the soybean crop grown in the United States is genetically modified (at least -+0 percent of U.S. com and 50 per cent of U.S. cotton are also transgenic). For the next crop yea r, it is estimated that 100 percent of the soybeans grown in Argentina will be herbicide resistant. But GMOs have struck a different cord in Eu rope, where they have met with numerous obstacles from consumers, businesses, policy makers and regulators

Review of What’s Economics Worth? Valuing Policy Research

This collection of papers—which grew out of an effort initiated by the In- ternational Food Policy Research Institute, with preliminary contributions presented at three symposia between 1996 and 2001—intellectually flows from the strand of applied economics that has endeavored to measure the returns to investments in technology and scientific research and development (R & D). Having found handsome returns for many R & D ventures, especially in agriculture, this body of research has lent itself well to advocating continued and increased public support for science—to the delight of many a scientist but, in an age of increasingly tight budget constraints, with troublesome implications for those calling for equally strong support for social sciences. It seemed then to be a legitimate extension, hopefully leading to a bit of useful self-promotion, to ask a similar question of social sciences in general and economics in particular (and policy research specifically). The result is a wide- ranging assortment of contributions, sprinkled with methodological reflections and observations, and some data. The book contains 13 chapters, including some previously published papers but also several contributed or commissioned original pieces. At its best junctures the book is thought provoking, providing insightful remarks as well as useful analogies and valuable personal viewpoints. It thus succeeds in arousing the reader’s interest in a set of questions that do not usually command the attention of economists’ working hours. The relative novelty of some of the issues addressed may encourage further related work, which would make this book a useful starting point. Inevitably, however, some critical questions are left unanswered, while others turn out to be intractable