Question

You have noticed that wheat, when watered at a certain time of day, grows much faster. Do you have any financial incentive to tell other farmers about this discovery? Explain your answer

Answer 1

No, the government is paying me a set amount. I do not have any incentive, nor will I earn extra money for sharing this information.

Answer 2

In fact, you have the incentive to keep the secret as long as you can.

You have discovered a technique that enhances the productivity in your crops. You are able to produce the same amount of a good in less time than before, hence you manage to save in terms of resources and decrease costs. Your profit margins are greater than before.

As your crops will be available sooner than those of your competitors, it is quite likely that you are not affected by supply excesses, which are typical in agricultural goods markets. As you are the first one to harvest, all your production will be sold while others will have to bear the problem of keeping unsold wheat. The longer you prevent your competitors from knowing your technique, the longer you will enjoy the benefits described above.