In this paper, we analyze the characteristics of licensing agreements established between agbiotech and seed companies for the commercialization of GMOs. Property rights for conventional seeds are generally based on the Plant Breeders Right. Evidence shows that the agbiotech company can hardly create ex nihilo a new and competitive seed business, and rather licenses the introduction and sales of the GM event to seeds companies.
Evidence also shows that some agbiotech companies paid a high price for acquiring seed companies.
However this intuition has not been confirmed empirically. Our model is based on a differentiated seed market. The suppliers are the seed companies who can possibly sign a license agreement with an agbiotech company in order to integrate a particular trait. Trade occurs during only one period. The model enables us to estimate, for each equilibrium, how the surplus variation is distributed among the different categories of actors and the market share of GM seed varieties.