Strategic trade and delegated competition

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Strategic Trade and Delegated Competition∗

Strategic trade theory has been criticized on the grounds that its predictions are overly sensitive to modeling assumptions. Applying recent results in duopoly theory, this paper considers three-stage games in which governments choose subsidies, firms’ owners choose incentive schemes for their managers, and then the managers compete in the product market. We show that if firms’ owners have suff...

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Strategic trade theory shows that government intervention in markets with small numbers of traders can boost the welfare of a country relative to free trade. This survey critically assesses the empirical evidence regarding this possibility. One finding is that while many international food and agricultural markets are characterized by oligopoly, price-cost markups tend to be small, and the pote...

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Evidence on Imperfect Competition and Strategic Trade Theory

Strategic trade theory shows that government intervention in markets with small numbers of traders can boost the welfare of a country relative to free trade. This survey critically assesses the empirical evidence regarding this possibility. One finding is that while many international food and agricultural markets are characterized by oligopoly, price-cost markups tend to be small, and the pote...

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ژورنال

عنوان ژورنال: Journal of International Economics

سال: 2005

ISSN: 0022-1996

DOI: 10.1016/j.jinteco.2004.04.003