In 2017, the economist Frederick Chen of Wake Forest University's Department of Economics published an analysis of the structural incentives facing biotech firms developing synthetic rhino horn. The paper preceded his collaboration with Michael 't Sas-Rolfes by four years and lays out the argument that the latter, more formal Ecological Economics paper would build on.
Chen's argument is uncomfortable for both sides of the public debate. He accepts the basic claim that synthetic substitutes can reduce poaching by depressing the price of wild horn through adverse selection, a phenomenon in which buyers' inability to distinguish high-quality and low-quality products drives demand and prices down. But he points out that the strategy works most cleanly when the synthetic is undesirable: difficult to distinguish from wild horn, but unappealing once acquired. A bio-identical substitute, indistinguishable from wild horn and consumed willingly, may not depress demand for the wild product at all; it may simply add to total demand by making the substance more accessible.
Chen's reasoning continues to the question of why a profit-seeking firm would or would not choose to flood the market with its own product. The answer, on standard economic grounds, is that it would not, because flooding drives down prices and revenues. The conservation outcome that synthetic-horn proponents had been advertising in the press cluster of 2015 thus depended on the firms behaving in ways that ran counter to their own profit motive.
His policy suggestions are pragmatic. Subsidize firms producing synthetic horn to incentivize production volume. Promote competition on the synthetic-horn supply side. Make it easier for nonprofit entities, which are not bound by the same profit-maximization constraints, to acquire or invest in synthetic-horn production technology, since a nonprofit could plausibly choose to flood the market with undesirable fakes to shut down demand through adverse selection.
"The science and technology to produce high-quality fake horns are within our grasp. Steps may need to be taken to structure the market for rhino horns so as to fully realize the potential of synthetic horns to save the rhinos." - Frederick Chen, 2017
Chen's framing, that synthetic horn as a structural intervention requiring active policy design rather than a market solution that automatically delivers conservation outcomes, is one of the analytical foundations the film draws on when it asks why the biotech approach did not, in the years that followed, deliver what its press coverage had implied it would.
