Trading Under Strategic Self-Constraint: Conceptual Issues and Factual Evidence

Henry Wan ()
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Henry Wan: Cornell University

A chapter in International Trade and Economic Dynamics, 2009, pp 203-213 from Springer

Abstract: One of the most important aspects in the current world economy is the rise of microelectronics, which is regarded as a general purpose technology (GPT). In particular, a significant instrument is the application-specific integrated circuits (ASICs). This instrument is supplied by international division of labor, under a novel production relationship, between a few capital-intensive “chip-foundries” and the large pool of “chip-designers”. To exclude itself from chip design, the foundry can avoid conflict of interest with potential chip designers. This behavior is modeled as a problem of mechanism design. It is shown that the commitment of the foundry enhances social welfare.

Keywords: Conceptual Issue; Chip Designer; Factual Evidence; Weakly Convex; Unit Production Cost (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_17

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DOI: 10.1007/978-3-540-78676-4_17

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