Optimal Export Policy for a New-Product Monopoly
AbstractA new welfare-enhancing role is identified for a policy of export subsidization in a new-product industry. An export subsidy policy promotes the (rational) perception that a high-quality export can be provided at a relatively low price. Thus, an export subsidy generates a first order benefit to welfare by enabling a high-quality export to be sold at a less-distorted, high price. The subsidy will also introduce distortions into the price of a low-quality export and, when product quality is policy-sensitive, the quality selection process. Since these choices are initially undistorted, however, the export-country welfare loss arising from new distortions is of second order importance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 898.
Date of creation: Aug 1990
Date of revision:
Contact details of provider:
Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014
Web page: http://www.kellogg.northwestern.edu/research/math/
More information through EDIRC
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grossman, Gene M & Horn, Henrik, 1988.
"Infant-Industry Protection Reconsidered: The Case of Informational Barriers to Entry,"
The Quarterly Journal of Economics,
MIT Press, vol. 103(4), pages 767-87, November.
- Gene M. Grossman & Henrik Horn, 1989. "Infant-Industry Protection Reconsidered: The Case of Informational Barriers to Entry," NBER Working Papers 2159, National Bureau of Economic Research, Inc.
- Kreps, David M & Wilson, Robert, 1982.
Econometric Society, vol. 50(4), pages 863-94, July.
- Grossman, G.N., 1989. "Promoting New Industrial Activities: A Survey Of Recent Arguments And Evidence," Papers 147, Princeton, Woodrow Wilson School - Public and International Affairs.
- Bagwell, Kyle & Riordan, Michael H, 1991.
"High and Declining Prices Signal Product Quality,"
American Economic Review,
American Economic Association, vol. 81(1), pages 224-39, March.
- Milgrom, Paul & Roberts, John, 1986.
"Price and Advertising Signals of Product Quality,"
Journal of Political Economy,
University of Chicago Press, vol. 94(4), pages 796-821, August.
- Brander, James A. & Spencer, Barbara J., 1985.
"Export subsidies and international market share rivalry,"
Journal of International Economics,
Elsevier, vol. 18(1-2), pages 83-100, February.
- James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
- Adriani, Fabrizio & Deidda, Luca, 2008.
"Competition and the signaling role of prices,"
16108, University Library of Munich, Germany.
- Axel F. A. Adam-Müller & Kit Pong Wong, 2002. "Restricted Export Flexibility and Risk Management with Options and Futures," CoFE Discussion Paper 02-07, Center of Finance and Econometrics, University of Konstanz.
- Mohd Amin, 2004. "Sensitivity of Tariffs and Quotas: A Signaling Game," International Trade 0401003, EconWPA.
- Bagwell, Kyle, 1992.
"Pricing to Signal Product Line Quality,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 1(1), pages 151-74, Spring.
- Kyle Bagwell, 1991. "Pricing to Signal Product Line Quality," Discussion Papers 921, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Bagwell, K., 1991. "Pricing to Signal Product Line Quality," Working Papers e-91-11, Hoover Institution, Stanford University.
- Dinopoulos, Elias & Livanis, Grigorios T. & West, Carol Taylor, 2005. "How Cool is C.O.O.L.?," Working Papers 15658, University of Florida, International Agricultural Trade and Policy Center.
- Desai, Mihir A. & Hines Jr., James R., 2008.
"Market reactions to export subsidies,"
Journal of International Economics,
Elsevier, vol. 74(2), pages 459-474, March.
- C. Simon Fan & Yifan Hu, 2006. "A Signaling Model of Quality and Export: with application to dumping," DEGIT Conference Papers c011_058, DEGIT, Dynamics, Economic Growth, and International Trade.
- Stephan, Levy, 2004. "Best-price Guarantees as a Quality Signal," MPRA Paper 13466, University Library of Munich, Germany, revised 02 Nov 2004.
- F. Adriani & LG. Deidda, 2006. "The Monopolist’s Blues," Working Paper CRENoS 200611, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Young-Han Kim, 1999. "The Welfare Analysis of Trade Policies: The Optimal Government Intervention Timing under Incomplete Information," International Economic Journal, Korean International Economic Association, vol. 13(4), pages 53-70.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fran Walker).
If references are entirely missing, you can add them using this form.