Estimating the Public Value of Conflicting Information: The Case of Genetically Modified Foods

Environmental groups have be- food products other than those that norcome the chief antagonists toward agricultural bio- mally carry allergens (See Friends of the technology innovations. They demonstrate and dis- Earth 2001; Greenpeace International 2001). seminate private information with the objective of Through press releases, web sites, and pro- changing the behavior of consumers and productests, environmental ers. We use experimental auctions with adult U.S. groups have been succonsumers and show that this information reduces cessful at publicizing their negative views significantly the demand for genetically modified on GM foods and affecting consumers’ and (GM)-food products and that it has significant producer s’ behavior.2 public good value—an average of 3 cents per prod- Environmental groups share the costs uct purchased, or roughly $2 billion annually. We of producing negative GM information.3 also show that the dissemination of independent third-party information about agricultural biotech- Their members benefit collectively from nology dissipatesmost of the public good value of reductions in demand for GM products negative GM-product information.