IDEAS home Printed from
   My bibliography  Save this paper

Uniform Subsidy Reductions in International Oligopoly


  • Sandin, Rickard

    (Department of Economics)


This paper studies the effect of production subsidies used as strategic instruments by two rivalling countries whose firms differ in production efficiency. In particular, it examines the welfare effects of a uniform subsidy reduction from the Cournot-Nash equilibrium under different assumptions regarding technology and taste. It is found that the net exporter (usually the efficient country) gains while the net importer (usually the inefficient country) loses from a uniform subsidy reduction. Results show that a non-linear demand function or marginal cost functions with different slopes across countries is necessary to obtain an increase in total welfare.

Suggested Citation

  • Sandin, Rickard, 1996. "Uniform Subsidy Reductions in International Oligopoly," SSE/EFI Working Paper Series in Economics and Finance 141, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0141

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Cournot oligopoly; heterogeneous countries; production subsidies;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:hastef:0141. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.