A Theory of Favoritism under International Oligopoly
AbstractThis paper offers an explanation of the fact that some foreign firms are favored at the expense of others, and characterizes the distribution of favors in terms of the cost parameters of firms, and a preference parameter in the government's objective function. We present a model where favors must be bought: they come from competing contributions. This model is compared with a benchmark model with a benevolent government. We show how the distribution of favors in the favor-seeking model deviates from the distribution that would be obtained if the government were really benevolent. On offre une explication du fait que certaines firmes étrangères sont mieux traitées que d'autres. On caractérise la distribution des faveurs qui sont associées à l'asymétrie des coûts. On modélise la situation où les faveurs sont achetées. On compare ce modèle de la recherche des rentes au modèle standard où le gouvernement maximise le bien-être social. On caractérise la différence entre les distributions des faveurs de ces deux modèles.
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Bibliographic InfoPaper provided by CIRANO in its series CIRANO Working Papers with number 2003s-15.
Date of creation: 01 Apr 2003
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Favoritism; Asymmetric Oligopoly; Cost Manipulation; Discriminatory Taxes; Favoritisme; oligopole asymétrique; manipulation de coûts; taxes discriminatoires;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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