A Theory of Favoritism under International Oligopoly

Ngo Long and Antoine Soubeyran

CIRANO Working Papers from CIRANO

Abstract: This paper offers an explanation of the fact that some foreign firms are favored at the expense of others, and characterizes the distribution of favors in terms of the cost parameters of firms, and a preference parameter in the government's objective function. We present a model where favors must be bought: they come from competing contributions. This model is compared with a benchmark model with a benevolent government. We show how the distribution of favors in the favor-seeking model deviates from the distribution that would be obtained if the government were really benevolent. On offre une explication du fait que certaines firmes étrangères sont mieux traitées que d'autres. On caractérise la distribution des faveurs qui sont associées à l'asymétrie des coûts. On modélise la situation où les faveurs sont achetées. On compare ce modèle de la recherche des rentes au modèle standard où le gouvernement maximise le bien-être social. On caractérise la différence entre les distributions des faveurs de ces deux modèles.

Keywords: Favoritism; Asymmetric Oligopoly; Cost Manipulation; Discriminatory Taxes; Favoritisme; oligopole asymétrique; manipulation de coûts; taxes discriminatoires (search for similar items in EconPapers)
JEL-codes: D43 H21 L13 (search for similar items in EconPapers)
Date: 2003-04-01
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2003s-15

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