Who Pays the Costs of Non‐GMO Segregation and Identity Preservation?

Abstract

Abstract Our aim is to explore who pays the costs and who reaps the benefits of maintaining a dual‐market system of genetically modified organisms (GMOs) and non‐GMOs. We analyze the welfare effects of the introduction of consumer “hatred” given GMO technology and the introduction of GMO technology given hatred. Making alternative assumptions of competitive and then monopolistic supply, we recognize that identity preservation (IP) of non‐GMOs creates costs for IP and non‐IP producers. We model these costs as depending on the sizes of the two supply channels.