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Abstract
The successful management of transgenic technology is likely to depend on the
economic behavioral response of farmers to the regulated use of transgenic crops. A
well-studied example is the widespread use of Bt-corn, in the United States, and
elsewhere, to control the European Corn Borer, a major corn pest. The extensive use of
Bt-corn has led to concerns about the emergence of insect resistance. The United States
Environment Protection Agency addressed this potential problem by developing an insect
resistance management strategy, based, in part, on complex mathematical models using
detailed biological assumptions about the population genetics and life history of the
European Corn Borer. However, seed companies and others have sometimes used
simpler deterministic profit models to justify the economics of Bt-corn to potential
growers. Therefore an over reliance, by regulatory agencies, on complex modeling
approaches may obscure the likely economic behavioral response of farmers who rely on
these less complex models. However, the determinants of adoption are numerous, profit
being one of them. We develop a simple model for the spread of resistance based on the
logistic growth equation and use it to investigate the effect of uncertainty on farmer
decisions to plant Bt-corn and follow EPA management rules. The model results suggest
that planting Bt-corn is an optimal strategy under the type of uncertainty assumed in the
model and that short-term economic behavior is likely to lead to the Environment
Protection Agency management rules not being followed. Our results add weight to
existing work on this problem.