Essays on commodity bundling and licensing with application to agricultural biotechnology

Application of genetic transformation in agriculture involves the ability to bundle traits in living organisms. This dissertation examines the economics of commodity bundling theory, and its relation to agricultural biotechnology, including crop protection systems such as genetic use restriction technologies (GURTs).; The first chapter of the dissertation examines the relation between commodity bundling and the leverage of market power. The modern literature on commodity bundling argues that a monopolist may use bundling to extend its monopoly power into an otherwise oligopolistic market by foreclosing entrants or excluding rivals. This approach is contrary to the Chicago critique of Posner (1976) and Bork (1978), who defend bundling as irrelevant to such monopolization, being incapable of extending the "one monopoly rent."; The second chapter examines the strategic incentive for gene holders to vertically integrate with seed companies, and with input oligopolies. I examine two genetically modified (GM) seed scenarios: (1) genes as substitutes for insecticides; (2) genes as complements to herbicides.; The third chapter brings together the implications of the first two chapters regarding the policy issue related to GURTs. I first discuss the mutual reinforcement effects of IPRs and biotechnology in recent years, and review the development of GURTs and how the major agricultural biotechnology companies behave in that regard. Both proponents and opponents of GURTs made strong arguments based on speculations. I discuss the major arguments by both sides, and argue the possible strategic use of bundling and licensing strategy by the biotech giants, because GURTs make it possible for a seed to be marketed as a vector of trait options. I also examine the validity of two major implicit assumptions held by those opposing GURTs: patenting does not affect the monopoly power of GURTs; and GURTs would take over the GM seed market. (Abstract shortened by UMI.)...