Second-mover advantage under strategic subsidy policy in a third market model

Kojun Hamada

Economics Bulletin, 2009, vol. 29, issue 1, 407-415

Abstract: This paper examines which of the Stackelberg leader or its follower has the advantage under strategic subsidy policy in a third market model. We show that even if governments choose export subsidies in whichever of a simultaneous-move or sequential-move game, the leader firm always loses its first-mover advantage in a Stackelberg duopoly. Furthermore, we examine the endogenous timing of subsidies by governments and show that the second-mover advantage occurs with regard to profit and welfare under the endogenous timing of subsidies.

Keywords: Stackelberg; competition (search for similar items in EconPapers)
JEL-codes: F1 L1 (search for similar items in EconPapers)
Date: 2009-03-23
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Citations: View citations in EconPapers (1)

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