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Strategic Trade Policy in Bargaining over Managerial Delegation Competition

Author

Listed:
  • Leonard F. S. Wang

    () (Department of Applied Economics, National University of Kaohsiung)

  • Wei Zhao

    () (Jinhe Center for Economic Research, Xi¡¦an Jiaotong University)

  • Ya -Chin Wang

    () (Department of Finance and Banking, Kun Shan University)

Abstract

In this paper, we assess the influence of the generalized Nash bargaining model on strategic trade policies. In particular, how the trade policy and the bargaining process over managerial contract are strategically connected within the context of bargaining over the sales delegation model is analyzed. We explore the policy impacts in two different models: the export rivalry model and the import-competing model, and show that the introduction of managers' bargaining process leads to a decrease in the export subsidy and optimal tariff in different models.

Suggested Citation

  • Leonard F. S. Wang & Wei Zhao & Ya -Chin Wang, 2008. "Strategic Trade Policy in Bargaining over Managerial Delegation Competition," Economics Bulletin, AccessEcon, vol. 6(38), pages 1-8.
  • Handle: RePEc:ebl:ecbull:eb-08f10023
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    References listed on IDEAS

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    1. Ritz, Robert A., 2008. "Strategic incentives for market share," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 586-597, March.
    2. Arjen van Witteloostuijn & Thijs Jansen & Arie van Lier, 2007. "Bargaining over managerial contracts in delegation games: managerial power, contract disclosure and cartel behavior," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(8), pages 897-904.
    3. repec:ebl:ecbull:v:12:y:2008:i:6:p:1-8 is not listed on IDEAS
    4. Jansen, Thijs & van Lier, Arie & van Witteloostuijn, Arjen, 2007. "A note on strategic delegation: The market share case," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 531-539, June.
    5. Vickers, John, 1985. "Delegation and the Theory of the Firm," Economic Journal, Royal Economic Society, vol. 95(380a), pages 138-147, Supplemen.
    6. Collie, David, 1991. "Optimum Welfare and Maximum Revenue Tariffs under Oligopoly," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(4), pages 398-401, November.
    7. Subhayu Bandyopadhyay & Sudeshna Bandyopadhyay, 2001. "Efficient bargaining, welfare and strategic export policy," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(2), pages 133-149.
    8. Fershtman, Chaim & Judd, Kenneth L, 1987. "Equilibrium Incentives in Oligopoly," American Economic Review, American Economic Association, vol. 77(5), pages 927-940, December.
    9. repec:ebl:ecbull:v:12:y:2008:i:7:p:1-8 is not listed on IDEAS
    10. Yasuhiko Nakamura, 2008. "Bargaining over Managerial Contracts in Delegation Games: The Differentiated Goods Case," Economics Bulletin, AccessEcon, vol. 12(6), pages 1-8.
    11. Roger Clarke & David R. Collie, 2006. "Optimum‐Welfare And Maximum‐Revenue Tariffs Under Bertrand Duopoly," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(3), pages 398-408, July.
    12. Mai, Chao-cheng & Hwang, Hong, 1988. "Optimal export subsidies and marginal cost differentials," Economics Letters, Elsevier, vol. 27(3), pages 279-282.
    13. Das, Satya P., 1997. "Strategic managerial delegation and trade policy," Journal of International Economics, Elsevier, vol. 43(1-2), pages 173-188, August.
    14. 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.
    15. David de Meza, 1986. "Export Subsidies and High Productivity: Cause or Effect?," Canadian Journal of Economics, Canadian Economics Association, vol. 19(2), pages 347-350, May.
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    Citations

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    Cited by:

    1. Fanti, Luciano & Buccella, Domenico, 2018. "Firms Controlled by Owners and Managerial Firms: The 'Strategic' Trade Policy Game Revisited," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 71(1), pages 51-72.
    2. Fanti, Luciano & Buccella, Domenico, 2016. "Passive unilateral cross-ownership and strategic trade policy," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 10, pages 1-22.

    More about this item

    Keywords

    Bargaining Delegation;

    JEL classification:

    • F1 - International Economics - - Trade
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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