The Santaniello theorem of irreversible benefits

Wesseler, Justus (2009): The Santaniello theorem of irreversible benefits. Published in: AgBioForum , Vol. 1, No. 12 (January 2009): pp. 8-13.

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.”

• Item Type: MPRA Paper
• Language: English
• Keywords: GMOs; irreversible benefits; real option; uncertainty
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights

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