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Industrial policy and duopolistic trade with dynamic demand (1996)

Driskill, Robert ; McCafferty, Stephen

Springer

Review of industrial organization 11 (1996), S. 355-373

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ISSN: 1573-7160

Keywords: Trade policy ; conjectural variations ; markovian strategies

Source: Springer Online Journal Archives 1860-2000

Topics: Economics

Notes: Abstract The authors study strategic trade policy in the framework of an explicit dynamic game in which home and foreign duopolists compete in a third-country market for non-competitive rents. Dynamics are introduced on the demand side by assuming demand for the product depends on past consumption of that good. The analysis demonstrates that the perfect equilibrium of the dynamic game can be replicated by a conjectural variations equilibrium, and that optimal policy requires a tax on exports.

Type of Medium: Electronic Resource

URL: http://dx.doi.org/10.1007/BF00414404

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