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Trade Efficiency and Trade Points: Small Versus Large Players

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  • Laura Lu
  • Panos Mourdoukoutas

Abstract

The impact of Trade Points on corporate performance depends on assumptions about returns to scale, types of games played, and size of gains in demand and revenues vis-$aacute;-viscosts. Specifically: (i) in a world of profit- maximizing firms, when the contribution of Trade Points to total revenues exceeds the additional costs, Trade Points help both small firms and Large ones with the size of gains depending on the types of returns to scale and the size of demand change: and (ii) whether to connect to Trade Points depends on the type of games assumed and the size of demand gains vis-$aacute;-viscosts. [F12, D00, L13, L86]

Suggested Citation

  • Laura Lu & Panos Mourdoukoutas, 1998. "Trade Efficiency and Trade Points: Small Versus Large Players," International Economic Journal, Taylor & Francis Journals, vol. 12(2), pages 77-91.
    • Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:77-91
    DOI: 10.1080/10168739800000014
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    References listed on IDEAS

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    1. Jean-Jacques Laffont, 1989. "The Economics of Uncertainty and Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121360, December.
    2. Maggi, Giovanni, 1996. "Strategic Trade Policies with Endogenous Mode of Competition," American Economic Review, American Economic Association, vol. 86(1), pages 237-258, March.
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