Strategic trade policy under incomplete information with integrated markets

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Excerpt from Strategic Trade Policy With Incompletely Informed Policymakers This Strategic trade policy under incomplete information with integrated markets book analyses the implications of incomplete information for strategic trade policy.

It revisits in an incomplete information context the simple but powerful point made by Brander and Spencer () that in an oligopolistic industry, unilateral government Cited by: modeling of strategic trade policy under integrated markets more difficult than when markets are segmented.

With world markets becoming more integrated, the assumption of segmented markets seems less tenable when firms regard the global economy as their market place.

Description Strategic trade policy under incomplete information with integrated markets EPUB

Consequently, the. A model of strategic trade policy under integrated markets is presented and optimal trade policies are derived under assumptions of both complete and incomplete information.

With the assumption of complete information it is shown that the optimal policy is an import tariff (export subsidy) when a country is a net importer (exporter).Cited by: 4.

A model of strategic trade policy under integrated markets is presented and optimal trade policies are derived under assumptions of both complete and incomplete information.

With the assumption of complete information it is shown that the optimal policy is an import tariff (export subsidy) when a coun - try is a net importer (exporter).

Contrary to the intuition that the policy makers' lack of information should reduce their incentives to engage in strategic trade intervention, the analysis suggests that information asymmetries may increase trade policy distortions in equilibrium, and ultimately.

model of strategic trade policy under integrated markets, under complete and incomplete information. In the former case, a low cost country will give an export subsidy which is fully countervailed by the high cost country's import tariff.

In the simultaneous signalling game, each country's expected welfare is higher than under free trade. Chapter 5 considers models of trade bloc formation under integrated markets. Theoretical models of trade blocs and integrated markets.

By Toby Kendall. presents a\ud model of strategic trade policy under integrated markets, under complete and\ud incomplete information. In the former case, a low cost country will give an export\ud subsidy which is fully countervailed by the high cost country's import tariff.

Author: Toby Kendall. model of strategic trade policy under integrated markets, under complete and incomplete information. In the former case, a low cost country will give an export subsidy which is fully countervailed by the high cost country's import tariff.

In the simultaneous signalling game, each country's expected welfare is higher than under free trade. "What Information is Needed for Welfare-Enhancing Policies under International Oligopoly", Japan and the World Economy,vol.

15, pp.

Details Strategic trade policy under incomplete information with integrated markets PDF

(with T. Furusawa and K. Higashida). “Foreign Monopoly and Trade Policy under Segmented and Integrated Markets", Economic Review,vol. Maggi, Giovanni (), “Strategic Trade Policy under Incomplete Information,” Discussion Paper in Economics No. Woodrow Wilson School of Public and Cited by: There is an extensive literature on trade policy under oligopoly that was surveyed by Brander () and is often labelled as strategic trade policy due to the profit-shifting motive for trade.

Strategic trade policy is defined as trade policy that conditions or alters a strategic relationship between firms, implying that strategic trade policy focuses primarily on trade policy in the. We study the informational impacts of multilateral voluntary export restraints (henceforth VERs) in an international trade model with differentiated products [1].

We first show that with competing mechanisms, the two firms’ lying intentions are strategic complements and will increase with the degree of product differentiation. Next, we show that each government will design their VERs menus Author: Chung Yuan Fu, Shirley J.

ARGUMENTS IN IMPLEMENTING THE STRATEGIC TRADE POLICY Some could be suspicious and consider that it is all about a mercantilist resumption tight to the optimal tariffs, to incipient industries, to the strategic importance of the industry, all decorated under the new shape of the international strategic Author: Liviu-George Maha, Andreea-Nicoleta Donici, Andreea Maha Maha.

JEL Classification Nos.: F13, L51 I. Introduction This paper analyses the implications of incomplete information for strategic trade policy. It revisits in an incomplete information context the simple but powerful point made by Brander and S|>encer () - that in an oligopolistic industry, unilateral government intervention can shift rents by.

Book description. The World Trade Organization (WTO) is an incomplete contract among sovereign countries. Trade policy flexibility mechanisms are designed to deal with contractual gaps, which are the inevitable consequence of this contractual by: 7. Strategic trade policy(STP) is a part of industrial policy.

This policy aimed at capturing profits of foreign firms: government spending involved in creating dynamic comparative advantage to capture export market by using R&D, subsidies, tax incentives, low interest loan, merger immunity, trade barriers etc.

Trade policy under Bertrand duopoly with integrated markets: the pure strategy equilibrium Economics Letters,60, (2), View citations (3) Bilateralism Is Good: Trade Blocs and Strategic Export Subsidies Oxford Economic Papers,49, (4), View citations (16) Delegation and Strategic Trade Policy.

The basic game theoretic structure of strategic trade policy is discussed in the chapter. It also focuses on the “third-market” model, in which rival oligopolistic exporters from two countries compete only in a third market.

The chapter develops the basic strategic export subsidies model in this context, Cited by: Strategic trade theory describes the policy certain countries adopt in order to affect the outcome of strategic interactions between firms in an international oligopoly, an industry dominated by a small number of firms.

The term ‘strategic’ in this context refers to the strategic interaction between firms; it does not refer to military objectives or importance of a specific industry. The main idea in this theory is.

Strategic trade policy refers to trade policy that guides large, multinational firms to favorable outcomes when interacting with other multinational firms in oligopolistic industries. An oligopoly is a market structure in which a small number of firms dominate an industry. • strategic trade policies are those that promote exports or discourage imports in particular sectors • advanced countries use strategic trade polices in order to improve their economic performance: overall growth slowed after the early s in the advanced world • the proper use of strategic trade policies involves the identification of File Size: 12KB.

There are a lot of theoretical and empirical studies on the possibility that strategic trade policies can enable firms to increase their share of rents from oligopolistic international markets. The theoretical strategic trade literature makes clear that this is a controversial by: 5.

Chapter 4, which is joint work with David R. Collie and Morten Hviid, presents a model of strategic trade policy under integrated markets, under complete and incomplete information.

In the former case, a low cost country will give an export subsidy which is fully countervailed by Author: Toby Kendall. In this paper the optimal policy and the stability of a tariff agreement among the importers of a monopolized good that is sold in an integrated market are studied.

To analyze the stability, the tariff agreement formation is modelled as a two-stage by: 1. Changes in the way economists perceive international trade have led to a greater variety of trade policy prescriptions, each given with muted confidence.

A selective sample gives some hint of the diversity. Paul Krugman ( ) puts the case for free trade: free trade is not passé, but it is an idea which has irretrievably lost its by: 3. providing any export subsidy to its exporting firms under incomplete information, while it was not at all under complete information.

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In the model, unlike Collie and Hviid (), the government’s policy on export subsidy is assumed to be unknown to the foreign firm. Since it is private information, the domestic firm observes such : Kyoungwon Rhee, Moonsung Kang.

5In the international trade literature, there is a number of studies scrutinizing strategic trade policy under incomplete information. For example, by employing a model á la Brander and Spencer (), (i) Creane and Miyagiwa () show that when subsidizing exporters, governments want to learn.

on unilateral trade policies under incomplete information. Section 5 examines the retaliation game under incomplete information. Section 6 extends the analysis to the case of strategic complements.

Section 7 concludes. THE MODEL Two identical firms, one from country 1 and one from country 2, compete a la Cournot in a third country. Maggi, Giovanni. ''Strategic Trade Policy un- der Incomplete Information." Mimeo, Princeton University, "Strategic Trade Policies with Endogenous Mode of Competition." Woodrow Wilson School Discussion Pa- per No.Princeton University, Qiu, Larry D.

"Optimal Strategic Trade Policy under Asymmetric Information.". LogEc provides access and usage for services based on the RePEc data set. LogEc is hosted by the Örebro University School of Business. Questions or comments?

Please see our explanation of how the statistics are collected or e-mail.accurately, the case for strategic trade policies was not like the traditional case for free trade, which (in the old trade theory) could be made a priori without consideration of the specific details of industries.

Strategic trade policies could be recommended, if at all. by Ingrid Henriksen & Morten Hviid & Paul Sharp; Strategic Trade Policy under Integrated Markets by Hviid, Morten & R.

Collie, David; Law and Peace: Contracts and the Success of the Danish Dairy Cooperatives by HENRIKSEN, INGRID & HVIID, MORTEN & SHARP, PAUL; Non‐Discrimination Clauses in the Retail Energy Sector by Morten Hviid & Catherine.