Spatial dimension of externalities and the coase theorem: Implications for Co-existence of transgenic crops

Adopters of transgenic crops produce a negative externality for producers of transgenic free crops through potential pollen flow. Producers of transgenic free crops produce a negative externality for growers of transgenic crops if they call for keeping a minimum distance. This chapter examines spatial implications of co-existence of transgenic crops from the perspective of Ronald Coase's influential paper The Problem of Social Cost published in 1960. First, the problem of co-existence will be assessed as a problem of social cost. Second, we discuss the impact of the distribution of different property rights on the adoption of transgenic crops. Third, we show that allocations of property rights result in different spatial agglomeration of transgenic and non-transgenic crops.