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Choice of export policy for oligopolistic industries with cross-ownership under uncertainty

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  • Ning, Haokai
  • Li, Ruihui
  • Bi, Zifan

Abstract

We investigate the role of cross-ownership in shaping optimal export policy under demand uncertainty in a Cournot duopoly. Governments choose between export subsidies and voluntary export restraints (VERs) prior to the resolution of uncertainty, seeking to shift oligopoly rents toward domestic firms. In a symmetric Nash equilibrium, where both governments adopt the same policy instrument, higher cross-ownership weakens export protection and raises expected welfare. In an asymmetric Nash equilibrium, where governments pursue different policy instruments, the impact of cross-ownership on export protection and expected welfare is more complex, depending on the instruments adopted. We further demonstrate that the critical threshold of demand uncertainty at which a Nash equilibrium emerges is directly linked to the extent of cross-ownership.

Suggested Citation

  • Ning, Haokai & Li, Ruihui & Bi, Zifan, 2026. "Choice of export policy for oligopolistic industries with cross-ownership under uncertainty," Economics Letters, Elsevier, vol. 259(C).
    • Handle: RePEc:eee:ecolet:v:259:y:2026:i:c:s0165176525006044
    DOI: 10.1016/j.econlet.2025.112767
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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