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International overhead cost sharing

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  • Zink, Helmut

Abstract

In this paper I investigate the effect of different stages of international trade on market structure and prices when production involves overhead cost, markets are intransparent, and customers have to search for offers. I show that two stages have to be distinguished: a first stage where each firm can offer its product in any country but customers cannot search in foreign countries and a second stage where each firm can offer in any country and each customer can search and buy in any country. In particular I investigate who benefits if one country increases its degree of market transparency and who benefits if the second stage of international trade is introduced.

Suggested Citation

  • Zink, Helmut, 1997. "International overhead cost sharing," Discussion Papers, Series II 343, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    • Handle: RePEc:zbw:kondp2:343
    as

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    References listed on IDEAS

    as
    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
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