Commercialization Mechanisms for New Plant Varieties
Developing and marketing new varieties is essential for the long-term profitability of US crop producers. The ultimate goal of university breeding programs is to release improved plant varieties, either with superior quality or more efficient production management. For certain horticultural products, notably apples, plant breeders have developed several new differentiated varieties that have the capacity to be marketed with premium prices and that can compete on world markets. If these innovations are not commercialized or are commercialized in a suboptimal way, then the benefits of the research are greatly reduced. In this chapter, we use game theoretic analysis and an experimental auction to investigate the effects of contract exclusivity and payment structure on innovator and producer profits from a hypothetical new apple variety.
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