Strategic Trade and Industrial Policy Towards Dynamic Oligopolies

We characterize optimal trade and industrial policy in dynamic oligopolistic markets. If governments can commit to future policies, optimal first-period intervention should diverge from the profit-shifting benchmark to an extent which exactly offsets the strategic behaviour implied by Fudenberg and Tirole's "fat cats and top dogs" taxonomy of business strategies. Without government commitment, there is an additional basis for intervention, whose sign depends on the stategic substitutability between future policy and current actions. We consider a variety of applications (to R&D spillovers, consumer switching costs, etc.) and extensions to second-best, revenue-constrained and entry-promotion policies

Business · Collusion · Commercial policy · Commit · Cournot competition · Economics · Industrial organization · International trade · Microeconomics · Oligopoly · Profit (economics · Computer Science · Economic Policies and Impacts · Global trade and economics · Merger and Competition Analysis

• Of Hype and Hyperbolas

  J Peter Neary•Journal of Economic Literature•2001

  Incluir item

• Study on the Impact of the Euro on Trade and Foreign Direct Investment

  Open Access•Richard Baldwin, Richard E Baldwin et al.•SSRN Electronic Journal•2008

  Incluir item

• International Competition in Vertically Differentiated Markets with Innovation and Imitation

  Open Access•Eugen Kováč, Krešimir Žigić•Economica•2014

  Incluir item

• The Role of Investment in Entry-Deterrence

  Avinash Dixit•The Economic Journal•1980

  Incluir item

• The Theory of Incipient Taxes

  C F Bickerdike•The Economic Journal•1906

  Incluir item