The Chaotic Price Growth Model of the Agricultural Monopoly and New Information and Communication Technology

Abstract

Patent is example of how the government creates an agricultural monopoly to serve the public interest. Patent law leads to higher prices than would occur under competition. But by allowing these agricultural monopoly producers to charge higher prices and earn higher profits, the patent laws also encourage research by these agricultural monopoly firms. Agricultural monopoly has the ability to influence the market price. Except an agricultural monopolist's choice of price and output, there are other decisions an agricultural monopolist must make. One of the most important is how much to invest in new information and communication technology. Agricultural monopoly will invest in a new information and communication technology whenever doing so lowers its costs. The basic aim of this paper is to construct a relatively simple chaotic growth model of the agricultural government-created monopoly price that is capable of generating stable equilibria, cycles, or chaos. Incentives to invest in a new information and communication technology are included in model.