Sunk costs and trade liberalisation
AbstractA model of vertical product differentiation is applied to the study of trade between two countries of differing sizes. Firms in the small country choose lower-quality products in autarky. Unlike A. Shaked and J. Sutton (1984), welfare effects of trade are fully analyzed and shown to depend on the degree of sunkness of costs. If firms have not sunk costs, losses from trade may arise for the small country in the short run (when quality is fixed) and for the large country in the long run (when quality is variable). If costs are sunk, both countries always gain from trade. Copyright 1992 by Royal Economic Society.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1991027.
Date of creation: 01 Jan 1991
Date of revision:
Contact details of provider:
Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
Other versions of this item:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Constantatos, Christos & Perrakis, Stylianos, 1995. "Différenciation verticale et structure du marché," L'Actualité Economique, Société Canadienne de Science Economique, vol. 71(1), pages 71-98, mars.
- Carmela Martin & Jose V. Blanes, 1999.
"The Nature and Causes of Intra-Industry Trade: Back to the Comparative Advantage Explanation? The Case of Spain,"
European Economy Group Working Papers
1, European Economy Group.
- José Blanes & Carmela Martín, 2000. "The nature and causes of intra-industry trade: Back to the comparative advantage explanation? The case of Spain," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(3), pages 423-441, 09.
- Alessandro Turrini, 2000. "High-quality bias in vertically differentiated oligopolies—a note on skills, trade, and welfare," Journal of Economics, Springer, vol. 71(2), pages 133-147, June.
- BACCHIEGA, Emanuele, 2004. "Vertical differentiation, wage bargaining and intra-industry trade liberalization," CORE Discussion Papers 2004028, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Ferto, Imre & Hubbard, Lionel J., 2002.
"Intra-Industry Trade in Horizontally and Vertically Differentiated Agri-Food Products between Hungary and the EU,"
2002 International Congress, August 28-31, 2002, Zaragoza, Spain
24884, European Association of Agricultural Economists.
- Imre Ferto & Lionel J. Hubbard, 2002. "Intra-industry trade in horizontally and vertically differentiated agrifood products between Hungary and the EU," IEHAS Discussion Papers 0202, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- L. Lambertini, 2002. "the Specialization of Production and Labour Mobility Under Endogenous Differentiation," Working Papers 453, Dipartimento Scienze Economiche, Universita' di Bologna.
- Lutz, Stefan, 2003.
"Mutual Recognition of National Minimum Quality Standards may Support International Convergence,"
ZEW Discussion Papers
03-17, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Stefan Lutz & Mina Baliamoune-Lutz, 2003. "Mutual Recognition of National Minimum Quality Standards may Support International Convergence," Journal of Industry, Competition and Trade, Springer, vol. 3(4), pages 293-311, December.
- Lambertini, L. & Rossini, G., 1997.
"Vertical Differentiation, Trade and Endogenous Common Standards,"
ASSET - Instituto De Economia Publica
160, ASSET (Association of Southern European Economic Theorists).
- Luca Lambertini & Gianpaolo Rossini, 1997. "Vertical Differentiation, Trade and Endogenous Common Standards," CIE Discussion Papers 1997-18, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- L. Lambertini & G. Rossini, 1996. "Vertical Differentiaiton, Trade and Endogenous Common Standards," Working Papers 263, Dipartimento Scienze Economiche, Universita' di Bologna.
- Tharakan, Joe & Thisse, Jacques-Francois, 2002.
"The importance of being small. Or when countries are areas and not points,"
Regional Science and Urban Economics,
Elsevier, vol. 32(3), pages 381-408, May.
- THARAKAN , Joe & THISSE, Jacques-François, . "The importance of being small. Or when countries are areas and not points," CORE Discussion Papers RP -1542, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Tharakan, Joe & Thisse, Jacques-François, 2001. "The Importance of Being Small. Or When Countries are Areas and not Points," CEPR Discussion Papers 2938, C.E.P.R. Discussion Papers.
- Fertő, Imre & Hubbard, Lionel J., 2003.
"A vertikálisan és horizontálisan differenciált mezőgazdasági termékek ágazaton belüli kereskedelme Magyarország és az Európai Unió Között
[Intra-industry trade in vertically and hori," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 152-163.
- Antonio Cabrales & Massimo Motta, 1996.
"Country asymmetries, endogenous product choice and the speed of trade liberalization,"
Economics Working Papers
259, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 1998.
- Cabrales, Antonio & Motta, Massimo, 1996. "Country Asymmetries, Endogenous Product Choice and the Speed of Trade Liberalization," CEPR Discussion Papers 1326, C.E.P.R. Discussion Papers.
- Andaluz, Joaquin, 2000. "On protection and vertical product differentiation," Regional Science and Urban Economics, Elsevier, vol. 30(1), pages 77-97, January.
- Fertő, Imre, 2006.
"Vertikálisan és horizontálisan differenciált, ágazaton belüli kereskedelem az Európai Unió tejpiacán
[Trade within vertically and horizontally differentiated industries on the milk market ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 526-539.
- Cabrales, Antonio & Motta, Massimo, 2001. "Country asymmetries, endogenous product choice and the timing of trade liberalization," European Economic Review, Elsevier, vol. 45(1), pages 87-107, January.
- Alberto Salvo, 2004.
"A General Analysis of Sequential Merger Games with an Application to Cross-Border Mergers,"
STICERD - Economics of Industry Papers
36, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Alberto Salvo, 2004. "A general analysis of sequential merger games with an application to cross-border mergers," LSE Research Online Documents on Economics 6732, London School of Economics and Political Science, LSE Library.
- Tharakan, J., 2001. "Revisiting “On nations’ size and transportation costs”," CORE Discussion Papers 2001032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jofre-Bonet, Mireia, 2000. "Health care: private and/or public provision," European Journal of Political Economy, Elsevier, vol. 16(3), pages 469-489, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.