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| Hennessy, David A.; Saak, Alexander E.. |
| Suppose a farmer had to apply a herbicide pre-emergence or not at all. The advent of a herbicide-tolerance trait innovation then provides the option to wait for more information before making a state-contingent post-emergence application. This option to wait can increase or decrease average herbicide use. For heterogeneous acre types, trait royalties increase with the level of uncertainty about the extent of weed damage. Royalties are largest when acre infestation susceptibility types are bunched around the type indifferent to applying the herbicide in the absence of the trait. The trait complements (substitutes for) information technologies that facilitate informed post-emergence (pre-emergence) decisions. |
| Tipo: Journal Article |
Palavras-chave: Genetics; Information inputs; Patent value; Post-emergence; Real option; Crop Production/Industries. |
| Ano: 2003 |
URL: http://purl.umn.edu/30723 |
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| Hennessy, David A.; Saak, Alexander E.. |
| Biotechnology has enriched the strategy set available to crop managers. Suppose a manager faces a decision between applying a pre-emergence pesticide or applying nothing at all. The advent of pesticide tolerance traits in plants admits the possibility of a state-contingent post-emergence application of pesticide. The innovation adds value in large part because it provides the manager with the option to wait for more information. For heterogeneous acre types, the determinants of trait royalties and of crop management strategies in equilibrium are studied. Pest resistance traits have different implications for crop management. Whereas a tolerance trait likely complements information technologies, the addition of a resistance trait may substitute for them. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Genetic trait; Information inputs; Patent value; Real option; Crop Production/Industries. |
| Ano: 2002 |
URL: http://purl.umn.edu/18515 |
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