Journal of Agricultural and Resource Economics
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Both patents and Plant Breeders’ Rights (PBRs) can protect plant innovations. Unlike patents, PBRs allow farmers to save part of their harvest to replant. We analyze the impact of this exemption on prices and innovation in a monopoly setting. In a PBR regime, a monopolist might let farmers self-produce, and he over- or under-invests compared to socially optimal investments. Under a PBR and patent regime, large (small) innovations are more likely to be patented (protected with PBRs), but self-production is not completely prevented, private investments are often socially optimal, and incentives to innovate are boosted. However, overall effects on welfare are ambiguous.
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