Journal article
Uncertainty and the choice of trade policy in oligopolistic industries
The Review of economic studies, Vol.56(1), pp.129-140
1989
DOI: 10.2307/2297754
Abstract
This paper investigates the design of trade policies in an uncertain world. Governments in each of two countries select between direct quantity controls and subsidies in an attempt to shift profits in favour of domestic, imperfectly competitive firms. The equilibrium of this bilateral policy game depends critically on the variability of the environment. In a world of certainty, both governments would choose to regulate the behaviour of their firms through direct quantity controls. With a sufficient amount of uncertainty, both governments regulate their firms through subsidies. This result reflects an important tradeoff between the strategic advantages of direct quantity controls and flexibility gained by the use of subsidies
Details
- Title: Subtitle
- Uncertainty and the choice of trade policy in oligopolistic industries
- Creators
- Russell Cooper - Hoover InstitutionRaymond Riezman - University of Iowa
- Resource Type
- Journal article
- Publication Details
- The Review of economic studies, Vol.56(1), pp.129-140
- DOI
- 10.2307/2297754
- ISSN
- 0034-6527
- eISSN
- 1467-937X
- Number of pages
- 12
- Language
- English
- Date published
- 1989
- Academic Unit
- Economics
- Record Identifier
- 9984963208002771
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