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Strategic Trade Policy and Network Compatibility

Tsuyoshi Toshimitsu

Journal of Industry, Competition and Trade, 2017, vol. 17, issue 2, 237-249

Abstract: Abstract We consider strategic trade policy for information and communication technology (ICT) product markets with international rivalry. Usually, ICT products exhibit network externalities and product compatibility (i.e., network compatibility). We demonstrate that the optimal strategic trade policy depends on the degree of network compatibility of ICT products. Furthermore, using an endogenous decision game for strategic variables (i.e., quantity and price), we consider the relationship between the optimal strategic trade policies and the endogenous mode of competition.

Keywords: Strategic trade policy; International rivalry; Network compatibility; Horizontally differentiated duopoly; Endogenous mode of competition (search for similar items in EconPapers)
JEL-codes: F12 F13 L13 L32 L33 (search for similar items in EconPapers)
Date: 2017
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