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The paper reports a study of the operation of the breeding system in the milk herd in Israel. Basic notions in quantitative genetics are explained and incorporated in a simulation model which is used to illustrate and analyse the selection process. Particularly emphasised are the traits common to selection and other research and development effort; among them, search, limited information, and biological and technical constraints. Differential technical changes affected the structure of the milk producing industry and its measured productivity; these effects are discussed in the last part of the paper.


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