This paper examines ex post subsidies as a means of enforcing market share targets. Subsidies set after firms make their strategic decisions are shown to create powerful incentives for firms to raise prices. These effects are stronger when targets, and hence subsidies, are specified on a firm-specific rather than industry-wide basis. This occurs because firms perceive themselves as subject to more competition (i.e., more elastic demand) in the latter case. Copyright 1998 by Blackwell Publishing Ltd.
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Volume (Year): 6 (1998) Issue (Month): 4 (November) Pages: 529-44 Download reference. The following formats are available: HTML
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Paper
Krishna, K & Thursby, M & Roy, S, 1996.
"Implementing Market Access,"
Papers
96-011, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
Krishna, K & Roy, S & Thursby, M, 1996.
"Implementaing Market Access,"
Papers
96-003, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
Kala Krishna & Suddhasatwa Roy & Marie Thursby, 1996.
"Implementing Market Access,"
NBER Working Papers
5593, National Bureau of Economic Research, Inc.
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Krishna, K. & Roy, S. & Thursby, M., 1998.
"Can Subsidies for MARs be Procompetitive,"
Papers
98-008, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).