The economics of managing evolution.

Humans are altering biological systems at unprecedented rates, and these alterations often have longer-term evolutionary impacts. Most obvious is the spread of resistance to pesticides and antibiotics. There are a wide variety of management strategies available to slow this evolution, and there are many reasons for using them. In this paper, we focus on the economic aspects of evolution management and ask: When is it economically beneficial for an individual decision-maker to invest in evolution management? We derive a simple dimensionless inequality showing that it is cost-effective to manage evolution when the percentage increase in the effective life span of the biological resource that management generates is larger than the percentage increase in annual profit that could be obtained by not managing evolution. We show how this inequality can be used to determine optimal investment choices for single decision-makers, to determine Nash equilibrium investment choices for multiple interacting decision-makers, and to examine how these equilibrium choices respond to regulatory interventions aimed at stimulating investment in evolution management. Our results are illustrated with examples involving Bacillus thuringiensis (Bt) crops and antibiotic use in fish farming.

Duke Scholars

Author David McAdams Fuqua School of Business