THIS PROJECT WILL DEVELOP AND ESTIMATE A NOVEL STRUCTURAL EQUILIBRIUM MODEL OF SEED PRICING, ROOTED IN MODERN INDUSTRIAL ORGANIZATION, THAT CAPTURES THE SALIENT ATTRIBUTES OF THE US CORN AND SOYBEAN SEED INDUSTRY: IMPERFECT SUBSTITUTABILITY OF SEED VARIETIES, COMPLEMENTARITY BETWEEN GERMPLASM AND GENETICALLY ENGINEERED (GE) TRAITS, CONCENTRATED SUPPLY SIDE ABLE TO EXERT MARKET POWER, AND GE TRAIT LICENSING BETWEEN COMPETING FIRMS. THE DEMAND SIDE WILL BE REPRESENTED BY A TWO-LEVEL NESTED-LOGIT DISCRETE CHOICE MODEL THAT ALLOWS FOR CORRELATION BETWEEN THE UNOBSERVED RETURNS TO CORN AND SOYBEAN VARIETIES. THE SUPPLY SIDE WILL MAINTAIN NASH EQUILIBRIUM PRICE CONDITIONS AND IMPLEMENT A NEW APPROACH TO CAPTURE THE IMPACT OF GE TRAIT LICENSING (BOTH AS A SOURCE OF REVENUE FOR LICENSORS AND AN ADDITIONAL COST FOR LICENSEES). THE THEORY UNDERLYING THIS SPECIFICATION, PARTICULARLY AS IT RELATES TO GE TRAIT LICENSING, WILL BE FULLY DEVELOPED. THE EMPIRICAL ANALYSIS WILL RELY ON A LARGE PROPRIETARY DATASET OF REPRESENTATIVE SAMPLES OF SEED PURCHASES AT THE FARM LEVEL FROM 1996 TO THE PRESENT. THESE DATA WILL BE SUPPLEMENTED WITH PUBLICLY AVAILABLE DATA TO CONSTRUCT AN OWNERSHIP MATRIX OF GE TRAITS. ECONOMETRIC ESTIMATION WILL DRAW ON APPROPRIATE IDENTIFICATION CONDITIONS USING INSTITUTIONAL BASED INSTRUMENTAL VARIABLES. THE ANALYSIS WILL PROVIDE RIGOROUS ECONOMETRIC EVIDENCE ON THE STRUCTURAL DETERMINANTS OF CORN AND SOYBEAN SEED PRICING, THE EXTENT OF MARKET POWER, AND THE SIZE AND DISTRIBUTION OF WELFARE GAINS ATTRIBUTABLE TO GE TRAITS. IT WILL ALSO PROVIDE NOVEL EVIDENCE ON THE IMPORTANCE OF GE TRAIT LICENSING AND ITS POSSIBLE ROLE IN FACILITATING COLLUSIVE OUTCOMES.