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Industry concentration and strategic trade policy in successive oligopoly

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  • Nese, Gjermund

    ()
    (Institute for Research in Economics and Business Administration)

  • Straume, Odd Rune

    ()
    (Stein Rokkan Centre for Social Studies and University of Bergen)

Abstract

We study a policy game between exporting and importing countries in vertically linked industries. In a successive international Cournot oligopoly, we let the governments in the importing and exporting countries use tax instruments strategically to shift rents up or down the vertical value-chain. We show that the equilibrium outcome depends crucially on the relative degree of competitiveness in the upstream and downstream parts of the industry. With respect to national welfare, a more competitive upstream industry may benefit an exporting (upstream) country while harming an importing (downstream) country. On the other hand, a more competitive downstream industry may harm exporting countries.

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Bibliographic Info

Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 10/04.

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Length: 29 pages
Date of creation: 06 Nov 2004
Date of revision:
Handle: RePEc:hhs:bergec:2004_010

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Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Phone: (+47)55589200
Fax: (+47)55589210
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Web page: http://www.uib.no/econ/en
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Keywords: Successive oligopoly; strategic trade policy; industry concentration.;

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References

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Cited by:
  1. Lommerud, Kjell Erik & Olsen, Trond E. & Straume, Odd Rune, 2005. "Access regulation and cross-border mergers: Is international coordination beneficial?," Discussion Papers, Department of Business and Management Science, Norwegian School of Economics 2005/8, Department of Business and Management Science, Norwegian School of Economics.
  2. Reza Oladi & John Gilbert, 2009. "Buyer and Seller Concentration in Global Commodity Markets," Working Papers, Utah State University, Department of Economics 200911, Utah State University, Department of Economics, revised 15 Sep 2009.
  3. Lommerud, Kjell Erik & Olsen, Trond E. & Straume, Odd Rune, 2006. "Cross border mergers and strategic trade policy with two-part taxation: is international policy coordination beneficial?," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-24, Social Science Research Center Berlin (WZB).
  4. Michal Mravec, 2007. "Understanding the Lack of Competition in Natural Gas Markets: The Impact of Storage Ownership and Upstream Competition," CERGE-EI Working Papers wp342, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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