Biosecurity Incentives, Network Effects, and Entry of a Rapidly Spreading Pest

David Hennessy

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Protection against pest invasion is a public good. Yet the nature of private incentives to avoid entry is poorly understood. This work shows that, due to increasing returns or network effects, private actions to avoid entry are strategic complements. This means that compulsory action, at least by a subset of parties, can be an effective policy. Both heterogeneity in biosecurity costs and the effect of private actions on the extent of the invasion threat are shown to have ambiguous effects on the magnitude of welfare loss due to strategic behavior. Communicated leadership by some party is preferred to simultaneous moves, and it may be best if the party with highest biosecurity costs assumes a leadership role.

Keywords: communication; complementarity; increasing returns; infectious disease; invasive species; network economics; public good (search for similar items in EconPapers)
JEL-codes: D6 H4 Q2 (search for similar items in EconPapers)
Date: 2012-03-29
New Economics Papers: this item is included in nep-net
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Published in Ecological Economics, December 2008, vol. 68 no. 1-2, pp. 230-239

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Journal Article: Biosecurity incentives, network effects, and entry of a rapidly spreading pest (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:35016

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