Strategic Trade and Industrial PolicyTowards Dynamic Oligopolies

Dermot Leahy and J. Peter Neary

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: In this paper characterise optimal trade and industrial policy in dynamic oligopolistic markets. If governments can commit to future policies, optimal first-period intervention should diverge from the profit-shifting benchmark to an extent which exactly offsets the strategic behaviour implied by Fudenberg and Tirole's "fat cats and top dogs" taxonomy of business strategies. Without government commitment, there is an additional basis for intervention, whose sign depends on the strategic substitutability between future policy and current actions. We consider a variety of applications (to R&D spillovers, consumer switching costs, etc.) and extensions to second-best, revenue-constrained and entry-promotion policies.

Date: 1998-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/DP0409.pdf (application/pdf)

Related works:
Journal Article: Strategic Trade and Industrial Policy towards Dynamic Oligopolies (2000)
Working Paper: Strategic Trade and Industrial Policy Towards Dynamic Oligopolies (1998)
Working Paper: Strategic trade and industrial policy towards dynamic oligopolies (1998)
Working Paper: Strategic Trade and Industrial Policy Towards Dynamic Oligopolies (1998)
Working Paper: Strategic trade and industrial policy towards dynamic oligopolies (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0409

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().