The unintended presence of traces of genetically modified (GM) crops in the harvests of conventional crops plays a prominent role in the debate over the coexistence of GM and conventional crops. One way to address the issue is the formation of GM-free or GM-only clubs. We model the decisions of individual farmers to cultivate either GM or conventional crops and combine this with a game theoretic model of club formation to investigate the feasibility of clubs. We consider two liability regimes: GM farmers are liable or they are not. We also consider two benchmarks: Nash equilibrium without negotiations and the efficient configuration as well as partial cooperation through Coasean clubs. We find that relatively large clubs can form but they are not always necessary.


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