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Cost uncertainty and trade liberalization in international oligopoly

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  • Moner-Colonques, Rafael

Abstract

In a game of incomplete information about costs we investigate conditions under which autarkic firms benefit from the opening of trade, both when the number of firms is exogenously and endogenously fixed. A social point of view is also taken to check under which circumstances bilateral trade liberalization is to both countries' advantage. We show that there may be cases when free trade is privately and socially favourable compared to the autarky situation. Typically everybody's interests harmonize for a certain degree of firms' diversification and a sufficiently large amount of uncertainty.
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  • Moner-Colonques, Rafael, 1998. "Cost uncertainty and trade liberalization in international oligopoly," Journal of International Economics, Elsevier, vol. 45(2), pages 369-376, August.
    • Handle: RePEc:eee:inecon:v:45:y:1998:i:2:p:369-376
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    10. Moner-Colonques, Rafael, 1998. "Cost uncertainty and trade liberalization in international oligopoly," Journal of International Economics, Elsevier, vol. 45(2), pages 369-376, August.
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    Cited by:

    1. Larue, Bruno & Yapo, Vincent, 2000. "Asymmetries in risk and in risk attitude: the duopoly case," Journal of Economics and Business, Elsevier, vol. 52(5), pages 435-453.
    2. Moner-Colonques, Rafael, 1998. "Cost uncertainty and trade liberalization in international oligopoly," Journal of International Economics, Elsevier, vol. 45(2), pages 369-376, August.
    3. José J. Sempere Monerris & Rafael Moner Colonques & Amparo Urbano Salvador, 2010. "Trade liberalization in vertically related markets," Working Papers. Serie AD 2010-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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