Assisting Domestic Industries under International Oligopoly: The Relevance of the Nature of Competition to Optimal Policies
AbstractOptimal trade and industrial policies are derived for a home market that is supplied by a domestic firm and a foreign firm. The optimal policy combination can be quite sensitive to the nature of the duopoly's competition. For example, for some cost and demand s tructures, the optimal policy under Cournot competition consists of a domestic production tax and a tariff, but that under Bertrand compet ition consists of a production subsidy and free trade. Copyright 1988 by American Economic Association.
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 78 (1988)
Issue (Month): 4 (September)
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