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Information and Disclosure in Strategic Trade Policy

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  • Anthony Creane
  • Kaz Miyagiwa

Abstract

We examine the standard assumption in the strategic trade policy literature that governments possess complete information. Assuming instead that firms have better information, we explore the long-term incentives for firms to consistently disclose information to their governments in the standard setting. We find that with quantity competition firms disclose both demand and cost information to the governments, thereby giving some justification to the literature's omniscient-government assumption. Further, the equilibrium exhibits an informational prisoner's dilemma with demand uncertainty, but not with cost uncertainty. With price competition, however, firms have no incentives to disclose information.

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Bibliographic Info

Paper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 0530.

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Date of creation: Nov 2005
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Handle: RePEc:emo:wp2003:0530

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  1. Okajima, Yoshitomo, 2003. "A note on 'optimal strategic trade policy under asymmetric information'," Journal of International Economics, Elsevier, vol. 61(1), pages 243-246, October.
  2. Anthony Creane & Kaz Miyagiwa, 2007. "Information and Disclosure in Strategic Trade Policy," ISER Discussion Paper 0705, Institute of Social and Economic Research, Osaka University.
  3. Eaton, Jonathan & Grossman, Gene M, 1986. "Optimal Trade and Industrial Policy under Oligopoly," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 383-406, May.
  4. Sajal Lahiri and Yoshiyasu Ono, . "Asymmetric Oligopoly, International Trade, and Welfare: Synthesis," Economics Discussion Papers 435, University of Essex, Department of Economics.
  5. Maggi, Giovanni, 1998. "A Note on "Strategic Trade Policy Design with Asymmetric Information and Public Contracts."," Review of Economic Studies, Wiley Blackwell, vol. 65(3), pages 623-25, July.
  6. Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, vol. 77(5), pages 927-40, December.
  7. James A. Brander, 1995. "Strategic Trade Policy," NBER Working Papers 5020, National Bureau of Economic Research, Inc.
  8. Maggi, G., 1997. "Strategic Trade Policy Under Incomplete Information," Papers 189, Princeton, Woodrow Wilson School - Public and International Affairs.
  9. Brainard, S Lael & Martimort, David, 1996. "Strategic Trade Policy Design with Asymmetric Information and Public Contracts," Review of Economic Studies, Wiley Blackwell, vol. 63(1), pages 81-105, January.
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Cited by:
  1. Anthony Creane & Kaz Miyagiwa, 2009. "Foreign Direct Investment and the Welfare Effects of Cost Harmonization," Emory Economics 0905, Department of Economics, Emory University (Atlanta).
  2. Anthony Creane & Kaz Miyagiwa, 2007. "Information and Disclosure in Strategic Trade Policy," ISER Discussion Paper 0705, Institute of Social and Economic Research, Osaka University.
  3. Liviu-George Maha & Andreea-Nicoleta Donici & Andreea Maha, 2012. "Limits And Difficulties In Implementing The Strategic Trade Policy," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 4, pages 736-746, December.
  4. Antoniou, Fabio & Tsakiris, Nikos, 2011. "Information and disclosure in strategic trade policy: Revisited," MPRA Paper 32949, University Library of Munich, Germany.
  5. Bou√ęt, Antoine & Cassagnard, Patrice, 2013. "Strategic trade policy under asymmetric information with screening," Economic Modelling, Elsevier, vol. 32(C), pages 286-293.
  6. Anthony Creane & Kaz Miyagiwa, 2007. "Export, Foreign Direct Investment, and Joint Ventures: Learning the Rival's Costs through Propinquity," ISER Discussion Paper 0691, Institute of Social and Economic Research, Osaka University.
  7. Fabio Antoniou & Phoebe Koundouri & Nikos Tsakiris, . "Information Disclosure Under Different Modes of Regulation," DEOS Working Papers 1015, Athens University of Economics and Business.
  8. Amir, Rabah & Jin, Jim Y. & Troege, Michael, 2010. "Robust results on the sharing of firm-specific information: Incentives and welfare effects," Journal of Mathematical Economics, Elsevier, vol. 46(5), pages 855-866, September.
  9. Mizuno, Tomomichi & Takauchi, Kazuhiro, 2013. "Rules of origin and uncertain cost of compliance," MPRA Paper 44431, University Library of Munich, Germany.

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