Export Subsidies versus Export Quotas with Incompletely Informed Policy Makers

Jota Ishikawa and Tomohiro Kuroda

Chapter 11 in Strategic Trade Policy, 2026, pp 255-268 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter analyses export subsidies (price incentives) and export quotas (quantity controls) in the Brander and Spencer (1985) model when policy makers have limited information on demand and cost structures. We examine necessary or sufficient information for policy makers to determine welfare-enhancing policies. It is crucial that they know the elasticity value of the slope of the inverse demand curve and the market share. It is also shown that for policy makers, export quotas are superior to export subsidies under certain conditions.

Keywords: Strategic Trade Policy; Rent-shifting; Monopoly; Oligopoly; Oligopsony; Trade Liberalization; Trade Costs; Tariffs; Subsidies; Foreign Direct Investment; Outsourcing; Segmented Markets; Integrated Markets; Intermediate Products; Vertical Market Structure; Information (search for similar items in EconPapers)
JEL-codes: F1 F10 F13 L1 (search for similar items in EconPapers)
Date: 2026
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