Endogenous Leadership with and without Policy Intervention: International Trade When Producer and Seller Differ

Zhifang Peng and Sajal Lahiri
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Zhifang Peng: Bloomsburg University of Pennsylvania; 312, Bakeless Center for the Humanities

A chapter in International Trade and Economic Dynamics, 2009, pp 187-201 from Springer

Abstract: Using a vertically linked model of international trade where producers and sellers are different entities and belong to two different countries, we examine the issue of endogenous leadership. In the absence of policy intervention, there are two cases depending on whether the producer or the seller is the leader. In the presence of policy intervention, the nationality of the leader and that of the follower also becomes important. We find necessary and sufficient conditions for endogenous leadership to arise, and find that in the presence of policy intervention and lump-sum transfers, leadership by the domestic firm — whether it is a producer or a seller — will emerge as the equilibrium.

Keywords: Policy Intervention; Reaction Function; Seller Relationship; Side Payment; Mixed Duopoly (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-78676-4_16

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DOI: 10.1007/978-3-540-78676-4_16

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