Second-mover advantage under strategic subsidy policy in a third market model
AbstractThis paper examines which of the Stackelberg leader or its follower has the advantage under strategic subsidy policy in a third market model. We show that even if governments choose export subsidies in whichever of a simultaneous-move or sequential-move game, the leader firm always loses its first-mover advantage in a Stackelberg duopoly. Furthermore, we examine the endogenous timing of subsidies by governments and show that the second-mover advantage occurs with regard to profit and welfare under the endogenous timing of subsidies.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 1 ()
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Find related papers by JEL classification:
- F1 - International Economics - - Trade
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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- Orlando I. Balboa & Andrew F. Daughety & Jennifer F. Reinganum, 2001.
"Market Structure and the Demand for Free Trade,"
Vanderbilt University Department of Economics Working Papers
0112, Vanderbilt University Department of Economics, revised Dec 2002.
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