Agricultural Economics Department


Date of this Version



Cornhusker Economics, October 10, 2018,


Copyright 2018 University of Nebraska


Technological innovation and the conduct of innovating firms are key weapons in the fight against hunger and the pursuit of food security around the world. Agricultural biotechnology seems uniquely equipped, if not destined, to spearhead the effort to combat malnutrition and hunger around the world by conferring significant agronomic benefits to producers and by having the ability to enhance both the resistance of plants to environmental stresses and the quality and nutritional value of food. Research that was recently published by the Center of Agricultural and Food Industrial Organization- Policy Research Group at the University of Nebraska Lincoln analyzes the conduct of innovating firms in hunger-stricken countries where, based on the Food and Agricultural Organization of the United Nations, more than 800 million people have been facing malnutrition and hunger.

Recognizing that malnutrition and hunger can be reduced through access to increased quantities of nutritious food offered at affordable prices, the research analyzes the output/pricing strategies of innovating agrifood companies in hunger-stricken areas of the world. To do so, the research develops an empirically relevant multi-market framework of heterogeneous consumers and an imperfectly competitive innovating firm that seeks to maximize profits. To analyze the profitmaximizing strategies of the innovating firm in different regions of the world, the research considers the innovating firm’s behavior in two regions – a hungerstricken country/region (HSC) that can benefit from genetically modified (GM) technology developed by the innovating firm, and the rest of the world where the innovation is marketed.