Strategic Trade Policy under Uncertainty
AbstractThis paper extends the Brander-Spencer (1985) model by considering market uncertainty, exploring nonlinear policy, and examining firms' choices of strategic variables. By investigating the interrelationship between trade policy and market conduct, we find that unlike the often-studied linear policy, a nonlinear policy can influence the domestic firm's choice of strategic variables and hece alter the market conduct in favor of the domestic country. Therefore, a nonlinear policy proves strictly superior to a linear one. Copyright 1995 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 3 (1995)
Issue (Month): 1 (February)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576
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