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On the Consistent Conjectures Equilibrium of Export Subsidy Game

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  • Tanaka, Yasuhito

Abstract

This paper explores an export subsidy game in an international duopoly in which governments of countries as well as firms hold conjectures about the response of other governments. In the framework with linear demand/quadratic cost functions, a homogeneous good and no home consumption, I shall obtain the relations among the conjectural variation of firms, that of governments, and the optimal subsidies for countries. And I shall show that if and only if firms hold the consistent conjectures, Nash type behavior (zero conjectural variation) of governments is consistent. Copyright 1991 by Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research

Suggested Citation

  • Tanaka, Yasuhito, 1991. "On the Consistent Conjectures Equilibrium of Export Subsidy Game," Bulletin of Economic Research, Wiley Blackwell, vol. 43(3), pages 259-271, July.
    • Handle: RePEc:bla:buecrs:v:43:y:1991:i:3:p:259-71
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    Cited by:

    1. Paulo Brito & Bipasa Datta & Huw Dixon, 2011. "The evolution of mixed conjectures in the rent-extraction game," Discussion Papers 11/06, Department of Economics, University of York.
    2. Holloway, Garth J., 1995. "Conjectural Variations With Fewer Apologies," Working Papers 225880, University of California, Davis, Department of Agricultural and Resource Economics.

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