The International Consortium on Agricultural Biotechnology Research (ICABR)


The Search for the Holy Grail?
Freedom to Operate in Canadian Agricultural Biotechnology

Daniel A. Dierker,
University of Saskatchewan,

Peter W. B. Philips

Using a two market model we show that, in a world of free and perfect information lacking private transactions costs, the adoption of an intellectual property rights regime, while a second best instrument, can be Pareto improving. We then show that by allowing economic agents the freedom to operate using the intellectual property of other economic agents a Pareto improvement can be shown from an intellectual property regime that does not allow freedom to operate.

Relaxing the information and transactions costs assumptions and performing comparative statics reveals that under different institutional arrangements the Pareto improvement observed, under the original assumptions can be curtailed or eliminated. These comparative statics suggest that certain institutional structures will produce various social welfare levels under differing conditions.

Using a description of the Canadian agricultural biotechnology research industry obtained by surveying the said industry the industry will be compared to the comparative statics to determine if there is any evidence to suggest that any one of the comparative static results mirrors the perception of the industry obtained from the industry. From there, institutional changes, that the comparative statics suggest as welfare enhancing, can be examined and recommended.

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