Albert K.A. Acquaye
Department of Agricultural and Resource Economics, University of California, Davis.
Department of Agricultural Economics and Rural Sociology, Auburn University.
intellectual property (IP) protected innovation are analyzed. A general analytical model parameterized with data from the US introduction of Bt cotton is used to examine welfare transfers from the imposition of price discrimination. When two markets are being served under a one-price policy, total welfare increases from price discrimination because monopolist gains exceed farmer losses. If only one market is being served under a one-price policy, farmers in the new market and the innovator gain, while farmer welfare in the existing market is unchanged.
Key words: Agricultural biotechnology, intellectual property protection, monopoly, price discrimination, welfare distribution.