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Can We Believe in Cold Showers?

Author

Listed:
  • Campbell, Neil

    (Massey University)

Abstract

This paper considers the case of a firm which faces the decision as to whether in invest in a cost-reducing technology with an uncertain return. Under certain conditions the removal of protection can facilitate this investment (a 'cold shower'). It is shown, in the case of Cournot competition, that a cold shower is more likely if a quota rather than a tariff is the protective instrument. It is also leader rather than a Cournot competitor. A Cournot market structure is used to consider a reduction in the number of foreign firms (an increase in the domestic frims market power). It is argured that it is reasonable to belive that this will increase the likelihood of a cold shower occurring.

Suggested Citation

  • Campbell, Neil, 1998. "Can We Believe in Cold Showers?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 13, pages 131-162.
    • Handle: RePEc:ris:integr:0069
    as

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    Citations

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    Cited by:

    1. Neil Campbell, 2003. "Does Trade Liberalization Make the Porter Hypothesis Less Relevant," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 2(2), pages 129-140, August.
    2. Campbell, Neil, 2001. "Quality Bargaining and Intermediate Goods Protection," Bulletin of Economic Research, Wiley Blackwell, vol. 53(2), pages 135-142, April.
    3. Neil Campbell, 2005. "Tariffs, Quotas, and the Corrupt Purchasing of Inappropriate Technology," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 4(1), pages 1-9, April.

    More about this item

    Keywords

    Cold; Showers;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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