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Two-stage game models of international oligopoly

Author

Listed:
  • Dermot Leahy

Abstract

This paper reexamines the import protection as export promotion thesis in a series of two-stage games in which firms choose R&D and/or capacity in the first stage and quantity or price in the second. It is shown that a tariff affects exports in two ways; firstly, if marginal cost is increasing, by raising home sales directly it crowds out exports; secondly by increasing R&D and/or capacity it raises exports indirectly. Prospects for export enhancing protection are compared for different games and shown to be better in the long run than in the short run.

Suggested Citation

  • Dermot Leahy, 1993. "Two-stage game models of international oligopoly," Working Papers 199306, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:199306
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10197/1710
    File Function: First version, 1993
    Download Restriction: no
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    More about this item

    Keywords

    Foreign trade regulation--Econometric models; Foreign trade promotion--Econometric models; Import quotas--Econometric models; Oligopolies;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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