The Santaniello theorem of irreversible benefits

Justus Wesseler

MPRA Paper from University Library of Munich, Germany

Abstract: Irreversible benefits favor an earlier introduction of GM crops versus a later one. A non-trivial question is if they also weigh more than reversible benefits similar to irreversible costs but in the opposite direction. In this contribution, I will show that indeed irreversible benefits do weigh more than reversible ones and indeed result in an irreversibility effect, albeit a positive one. The problem can be summarized by the following theorem: “Irreversible benefits justify the immediate introduction of transgenic crops, even if future uncertainty about reversible benefits include negative benefits and traditional cost-benefit analysis, and treating all benefits and costs as reversible would reject the introduction.” I call this theorem—in honor of Vittorio Santaniello—the “The Santaniello Theorem of Irreversible Benefits.”

Keywords: GMOs; irreversible benefits; real option; uncertainty (search for similar items in EconPapers)
JEL-codes: D8 O1 O3 Q0 (search for similar items in EconPapers)
Date: 2009-01
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Citations: View citations in EconPapers (5)

Published in AgBioForum 12.1(2009): pp. 8-13

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