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Endogenous Timing Decision on Trade Policies Between Importing and Exporting Countries with Many Firms

  • Yordying SupasriEmail author
  • Makoto Tawada
Chapter
  • 378 Downloads
Part of the New Frontiers in Regional Science: Asian Perspectives book series (NFRSASIPER, volume 10)

Abstract

This chapter examines strategic trade policy games where the number of firms in the importing and exporting countries differs and each firm plays as a Cournot oligopolist. Under the assumption of linear demand and constant marginal cost, we show that, if the number of firms in the exporting country exceeds that of the importing country by more than three, the government of the exporting country chooses to behave as a leader and imposes an export tax on home firms. The government of the importing country becomes a follower and imposes an import tariff on foreign firms. The result is opposite to that of the previous study, where each country has only one firm.

Keywords

Policy timing game Two-country model Arbitrary number of firms Tariff and subsidy 

Notes

Acknowledgements

We would like to express our gratitude to Professors Masayuki Hayashibara, Yasushi Kawabata, Murray C. Kemp, Jaerang Lee, Arnold Schweinberger, Koji Shimomura, and Tsuyoshi Toshimitsu for the original paper. We also thank the publisher John Wiley & Sons Ltd. for permitting us to reuse the original paper “Endogenous Timing in a Strategic Trade Policy Game: A Two-country Oligopoly Model with Multiple Firms,” Review of International Economics. Vol.11, pp.275–290, 2007, for this chapter.

References

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Copyright information

© Springer Japan 2016

Authors and Affiliations

  1. 1.Department of East Asian AffairsMinistry of Foreign Affairs of ThailandBangkokThailand
  2. 2.Faculty of EconomicsAichi Gakuin UniversityNagoyaJapan

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