Multiproduct oligopoly and trade between asymmetric countries

Yi‐Ling Cheng and Takatoshi Tabuchi

Review of International Economics, 2018, vol. 26, issue 3, 524-538

Abstract: This paper develops a general equilibrium model of oligopolistic multiproduct firms conducting trade between asymmetric countries, in which heterogeneous entrants choose their product ranges and outputs. We show that there are fewer exporters in the larger country, and each produces a wider range of products but exports fewer varieties. We also show that while trade liberalization increases the total number of consumed varieties, it decreases the total number of firms and may reduce the product range of each firm.

Date: 2018
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