Genetically Modified Agricultural Products Suppliers' Opportunism Behaviors Regulation

Transgenic technology has become one of the most rapid applied technologies.From 1996 to 2014,planting areas of GM crops have increased by more than 100 times and up to 181.5 million hectares.In 2014 China has planted 3.9 million hectares of transgenic cotton and papaya and 7.1 million farmers have planted genetically modified(GM)crops with $1.6 billion of output values.The expansion of GM crops is overwhelming.However,the public appeal for the regulation on GM product from the government due to the scientific uncertainty and asymmetric information of GM product.Based on the attitude and the status of the domestic reports on GM products,to use the method of experimental economics to obtain consumers' auction bidding price on GM product and GMO-free product,and analyze the impact of labeling policy on consumer welfare;After analyzing the consumers,to use the theory and method of economics to study the separating perfect Bayesian equilibriums and the pricing strategy of the firms of GM product and GMO-free product from the perspective of dynamic game.Furthermore,to analyze the credit decision mechanism of the GMO-free product firm from the perspective of incentive.Finally,to summarize and puts forward to policy suggestions.First,following the research themes,according to the reports on GM products in the important newspaper in "Chinese important newspaper database" from 2010 to 2014,it reveals the fact behind the GM product debates and consumers' demands for the supervision.Second,based on data from our economic experiments,the probability density function of consumer attitudes towards genetically modified apple is estimated using Matlab Numerical simulation and maximum likelihood method.By comparing the adjusted Kumaraswamy distribution with the Uniform distribution,we find that consumer attitudes in our experiments do not follow the Uniform distribution but instead fit an adjusted Kumaraswamy distribution.Moreover,consumer welfares under the voluntary labeling and the mandatory labeling regimes are calculated,which show that voluntary labeling is superior to mandatory labeling with the higher separation cost,while mandatory labeling is not necessarily better with lower separation cost.Third,in the context of imperfect competition,incomplete information and scientific uncertainty,a dynamic game with a typical consumer and duopoly firms is built.According to the backward induction,at first we solve the problem of the typical consumer based on the principle of the utility maximization,and then solve the problem of firms based on the principle of the profit maximization.After the separating perfect Bayesian equilibriums are deduced,we focus on the pricing strategy of duopoly firms.The results show that there are two separating perfect Bayesian equilibriums in which the price of the conventional product is significantly higher than that of GM product and the two prices are strategic complements.The larger separating perfect Bayesian equilibrium is the first-best solution if the price of the conventional product is low enough;otherwise,the smaller equilibrium is the optimal solution.In fact,when the difference between the conventional product and GM product is large enough,the price of GM product is higher than the basic utility and the smaller separating perfect Bayesian equilibrium is the first-best solution.Finally,taking the government regulation,consumer rights protection consciousness,the honest condition of supply chain and the degree of accuracy of traceability system into account,a principal-agent model with more wide applicability is constructed.Based on the incentive compatibility constraint condition of GMO-free firms,we discusse how to ease food problems due to the firms' opportunism behaviors.Results show that the incentive compatibility mechanism will be promoted by improving the density and strength of government regulation,the honest level of supply chain,consumers' rights consciousness and the agricultural product traceability system.The innovation of this study is listed as follows: First,when analyzing the impact of GM product labeling policy on consumer welfare,we use the adjusted Kumaraswamy distribution instead of the Uniform distribution commonly used in the past literature.Additionally,the PDFs under the voluntary labeling and the mandatory labeling regimes are estimated by the actual auction data respectively,which is different from the past literature to assume that the consumer attitudes towards GM product under the different regimes follow the same Uniform distribution.Second,in the study of the pricing strategy of duopoly firms,scientific uncertainty is taken into account and viewed as a risk with a given expectation and variance.Finally,when analyzing the effect of the government regulation and consumer rights protection on the honest decision of product firms,a principal-agent model considering the government regulation,consumer rights protection consciousness,the honest condition of supply chain and the degree of accuracy of traceability system is constructed.