Switching Costs and the foreign Firm's Entry
AbstractThis paper considers a two-period model of market entry with homogeneous products and switching costs. It is shown that the pro-competitive effect of a foreign firm's entry (i.e., unilateral trade liberalization) emerges before the entry. Also, conditions that are conducive to a competitive environment in the second-period are shown to yield a less competitive outcome in the first-period. That is, when the marginal cost of the foreign entrant is relatively low, the first-period output of a domestic monopolist is relatively low as well.
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 University Library of Munich, Germany in its series MPRA Paper with number 8093.
Date of creation: 2008
Date of revision:
Switching Costs; Foreign Firm's Entry;
Other versions of this item:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-15 (All new papers)
- NEP-COM-2008-04-15 (Industrial Competition)
- NEP-INT-2008-04-15 (International Trade)
- NEP-MIC-2008-04-15 (Microeconomics)
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.:
- Klemperer, Paul, 1995. "Competition When Consumers Have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 62(4), pages 515-39, October.
- Brander, James A., 1981.
"Intra-industry trade in identical commodities,"
Journal of International Economics,
Elsevier, vol. 11(1), pages 1-14, February.
- James Brander, 1980. "Intra-Industry Trade in Identical Commodities," Working Papers, Queen's University, Department of Economics 380, Queen's University, Department of Economics.
- Klemperer, Paul, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 102(2), pages 375-94, May.
- Toru Kikuchi, 2007. "Switching costs and the impact of trade liberalization," Economics Bulletin, AccessEcon, vol. 6(6), pages 1-7.
- Collie, David R & Roger Clarke, 2003.
"Product Differentiation and the Gains from Trade under Bertrand Duopoly,"
Royal Economic Society Annual Conference 2003, Royal Economic Society
47, Royal Economic Society.
- Roger Clarke & David Collie, 2003. "Product differentiation and the gains from trade under Bertrand duopoly," Canadian Journal of Economics, Canadian Economics Association, vol. 36(3), pages 658-673, August.
- Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
- Collie, David & de Meza, David, 2003. "Comparative advantage and the pursuit of strategic trade policy," Economics Letters, Elsevier, vol. 81(2), pages 279-283, November.
- To, Theodore, 1994.
"Export subsidies and oligopoly with switching costs,"
Journal of International Economics,
Elsevier, vol. 37(1-2), pages 97-110, August.
- To, T., 1993. "Export Subsidies and Oligopoly with Switching Costs," Papers, Tilburg - Center for Economic Research 9340, Tilburg - Center for Economic Research.
- To, T., 1993. "Export subsidies and oligopoly with switching costs," Discussion Paper, Tilburg University, Center for Economic Research 1993-40, Tilburg University, Center for Economic Research.
- Markusen, James R., 1981. "Trade and the gains from trade with imperfect competition," Journal of International Economics, Elsevier, vol. 11(4), pages 531-551, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.