This chapter demonstrates the complexity of the relationship among incentives, pesticide applications, and resistance buildup. First, analysis of the impacts of pesticide use must consider both the dynamics of the overall pest and the resistance buildup. Farmers may overapply chemicals if they ignore resistance dynamics but may underapply chemicals if they ignore population dynamics. Furthermore, other factors (e.g., including alternative chemicals, integrated pest management, crop rotation) must be considered in assessing the impact of pesticide use on resistance. Second, pest resistance is significantly affected by the structure of the industry, property rights, and patent considerations. Manufacturers will likely have a monopoly on the production of new pesticides during the life of the patent, which will provide the incentive to underapply them relative to the optimal solution. Furthermore, manufacturers are concerned with the negative side-effects of resistance buildup because of the impact on future sales and their reputation. Thus, they may be actively involved in activities to reduce resistance buildup. Indeed, we present evidence of manufacturer involvement in resistance management and resistance prevention. We also show that manufacturers' incentives to control resistance may be weaker than what is socially desirable because of the limitation of a patent's life. Third, manufacturers' incentives and choices will likely lead to overapplication of pesticides by myopic farmers as the chemicals get older and the supply network becomes more competitive. There are several old pesticides (mostly organophosphates or carbonates) that have long been used because of a lack of significant resistance buildup potential or the existence of effective resistance management schemes. Pest management agencies should be especially aware of potential problems with fairly new chemicals once the initial patent period lapses, if the provision of the chemicals increases, or if the initial manufacturer does not get very involved in the product stewardship. Finally, in addition to the manufacturers and users of the pesticides, other economic agents, in particular pesticide advisors and extension specialists, are involved in pest control decisions. Extension and especially individual consultants have the incentive to reduce resistance buildup and improve the performance of pest control agents. Our analysis suggests that the network of economic agents concerned about and involved in decisions regarding pest management and control of resistance buildup is quite complex. Even if individual growers may not be concerned with resistance and population dynamics issues when applying pesticides, other agents affecting their decisions may have these issues in mind.
