R&D Investments in Plant Breeding under Changing Intellectual Property Rights

In a Cournot duopoly model, we examine three policy regimes relevant to current international plant breeding: patents alone, patents with a farmer exemption to use saved seed, and patents with research collaboration. In the symmetric version of the model where firms are identical, we show that the...

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Main Authors: Mehdi Arzandeh, Derek G. Brewin
Format: Article
Language:English
Published: EconJournals 2021-11-01
Series:International Journal of Economics and Financial Issues
Online Access:http://mail.econjournals.com/index.php/ijefi/article/view/11544
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author Mehdi Arzandeh
Derek G. Brewin
author_facet Mehdi Arzandeh
Derek G. Brewin
author_sort Mehdi Arzandeh
collection DOAJ
description In a Cournot duopoly model, we examine three policy regimes relevant to current international plant breeding: patents alone, patents with a farmer exemption to use saved seed, and patents with research collaboration. In the symmetric version of the model where firms are identical, we show that the social planner prefers patents with research collaboration over patents alone and prefers the patents alone to patents with a farmer exemption. We examine two variations of the model where firms are asymmetric i. due to cost differences and ii. due to the different endowments of germplasm. Situations develop where the research collaboration resolves the common pool problem and increases R&D investment and where it creates free riding problem and decreases R&D investment. We show that the lower cost (more endowed) breeder invests more in R&D under the research collaboration than patents if variety differentiation is high and cost (knowledge endowment) dispersion is low. On the other hand, the higher cost (less endowed) breeder, generally, invests less in R&D under a research collaboration if variety differentiation or cost (knowledge endowment) dispersion is low. These findings suggest new gains are likely from the adoption of international conventions of plant breeders' rights.  Keywords: Plant breeding, farmer exemption, research collaboration, Intellectual Property Rights, product differentiation, Cournot oligopoly. JEL Classifications: D21, D43, D60, D82, L13, L24, O34, O38, Q16, Q18 DOI: https://doi.org/10.32479/ijefi.11544
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spelling doaj.art-13cde8589954418ea8b9e70ec0fcef902023-02-15T16:20:05ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382021-11-01116R&D Investments in Plant Breeding under Changing Intellectual Property RightsMehdi Arzandeh0Derek G. Brewin1Lakehead UniversityUniversity of Manitoba In a Cournot duopoly model, we examine three policy regimes relevant to current international plant breeding: patents alone, patents with a farmer exemption to use saved seed, and patents with research collaboration. In the symmetric version of the model where firms are identical, we show that the social planner prefers patents with research collaboration over patents alone and prefers the patents alone to patents with a farmer exemption. We examine two variations of the model where firms are asymmetric i. due to cost differences and ii. due to the different endowments of germplasm. Situations develop where the research collaboration resolves the common pool problem and increases R&D investment and where it creates free riding problem and decreases R&D investment. We show that the lower cost (more endowed) breeder invests more in R&D under the research collaboration than patents if variety differentiation is high and cost (knowledge endowment) dispersion is low. On the other hand, the higher cost (less endowed) breeder, generally, invests less in R&D under a research collaboration if variety differentiation or cost (knowledge endowment) dispersion is low. These findings suggest new gains are likely from the adoption of international conventions of plant breeders' rights.  Keywords: Plant breeding, farmer exemption, research collaboration, Intellectual Property Rights, product differentiation, Cournot oligopoly. JEL Classifications: D21, D43, D60, D82, L13, L24, O34, O38, Q16, Q18 DOI: https://doi.org/10.32479/ijefi.11544 http://mail.econjournals.com/index.php/ijefi/article/view/11544
spellingShingle Mehdi Arzandeh
Derek G. Brewin
R&D Investments in Plant Breeding under Changing Intellectual Property Rights
International Journal of Economics and Financial Issues
title R&D Investments in Plant Breeding under Changing Intellectual Property Rights
title_full R&D Investments in Plant Breeding under Changing Intellectual Property Rights
title_fullStr R&D Investments in Plant Breeding under Changing Intellectual Property Rights
title_full_unstemmed R&D Investments in Plant Breeding under Changing Intellectual Property Rights
title_short R&D Investments in Plant Breeding under Changing Intellectual Property Rights
title_sort r d investments in plant breeding under changing intellectual property rights
url http://mail.econjournals.com/index.php/ijefi/article/view/11544
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AT derekgbrewin rdinvestmentsinplantbreedingunderchangingintellectualpropertyrights