TITLE:
Spinning the Facts against Genetically Engineered Foods?
AUTHORS:
Troy Gordon Schmitz, Manhong Zhu Smith
KEYWORDS:
Genetically Engineered Foods, Genetically Modified Organisms, GE Foods, GMOs, Non-GM, Biotech Crops, Bioengineered Foods, Health Economics, Signaling Game
JOURNAL NAME:
Theoretical Economics Letters,
Vol.10 No.3,
May
22,
2020
ABSTRACT: A signaling game is developed in order to derive the
equilibrium conditions under which special interest groups (SIGs) involved in
the controversial debate over genetically engineered (GE) foods have the
incentive to truthfully reveal their information or spin facts regarding the
health impact of GE foods. Consumers can choose to inspect information provided
by SIGs at a cost. The risk of spinning facts is much higher for pro-GE groups,
because if it turns out that a certain GE food is unsafe, the penalty will be
severe. However, anti-GE groups can still spin facts at low risk even if
consumers choose to inspect. This helps explain why some pro-GE groups,
particularly the biotech industry, tend to remain silent. Revealing information
regarding the safety of GE foods could be counterproductive given pre-existing
public skepticism. Consumers may not make “better” decisions with more
information provided because more information increases their inspection costs.
When it is costlier for consumers to inspect, it is more likely that anti-GE
groups will continue to spin facts about the negative health impact of GE
foods.