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Comparative Advantage under Oligopoly

Author

Listed:
  • CORDELLA, Tito
  • GABSZEWICZ, Jean

    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

Abstract

We analyze the principle of comparative advantage when agents in the world market are aware of the influence their individual supply exerts on the equilibrium exchange rate of goods. We show that specialization following comparative disadvantage can be an oligopoly equilibrium in a Ricardian economy. Moreover, for a wide class of economies, it is the only one. Nonetheless, when the number of agents in each country increases without limit, the equilibrium in which specialization follows comparative advant.age again obtains.

Suggested Citation

  • CORDELLA, Tito & GABSZEWICZ, Jean, 1993. "Comparative Advantage under Oligopoly," LIDAM Discussion Papers CORE 1993007, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1993007
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    Citations

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    Cited by:

    1. Cordella, Tito & J. Gabszewicz, Jean, 1997. "Comparative advantage under oligopoly," Journal of International Economics, Elsevier, vol. 43(3-4), pages 333-346, November.
    2. Rudy Colacicco, 2015. "Ten Years Of General Oligopolistic Equilibrium: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 965-992, December.
    3. Ruffin, Roy J., 2003. "Oligopoly and trade: what, how much, and for whom?," Journal of International Economics, Elsevier, vol. 60(2), pages 315-335, August.
    4. Bacchiega, Emanuele, 2013. "A note on the effects of market power distribution in Cordella and Gabszewicz's Ricardian model," Research in Economics, Elsevier, vol. 67(2), pages 111-116.
    5. J.Peter Neary, 2002. "Foreign Competition and Wage Inequality," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 680-693, November.
    6. Toraubally, Waseem A., 2022. "Strategic trading and Ricardian comparative advantage," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 428-447.
    7. Ramón Torregrosa, 2008. "Macroeconomic effects of an indirect tax substitution," Journal of Economics, Springer, vol. 94(3), pages 199-221, September.
    8. Rabah Amir & Hend Ghazzai & Rim Lahmandi-Ayed, 2020. "On the Political Economy of Free Trade," Working Papers hal-02506064, HAL.
    9. Ansgar F. Quint & Jonas F. Rudsinske, 2024. "Asymmetric general oligopolistic equilibrium," The World Economy, Wiley Blackwell, vol. 47(3), pages 1167-1190, March.
    10. Fisher, Eric ON. & Kakkar, Vikas, 2004. "On the evolution of comparative advantage in matching models," Journal of International Economics, Elsevier, vol. 64(1), pages 169-193, October.
    11. Jean-Marc Bonnisseau & Michael Florig, 2005. "Non-existence of Duopoly Equilibria: A Simple Numerical Example," Journal of Economics, Springer, vol. 85(1), pages 65-71, July.
    12. E. Bacchiega, 2011. "Comparative Advantage Under Monopoly: A Note On the Role of Market Power," Working Papers wp724, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    Keywords

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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