Cost Uncertainty and Trade Liberalization in International Oligopoly

Rafael Moner Colonques
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Rafael Moner Colonques: CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium an Universitat de Valencia, Spain

No 1995068, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In a game of incomplete information about costs we investigate conditions under which autarkic firms benefit from the opening of trade, both when the number of firms is exogenously and endogenously fixed. A social point of view is also taken to check under which circumstances bilateral trade liberalization is to both countries' advantage. We show that there may be cases when free trade is privately and socially favourable compared to the autarky situation. Typically everybody's interests harmonize for a certain degree of firms' diversification and a sufficiently large amount of uncertainty.

Date: 1995-12-01
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Related works:
Journal Article: Cost uncertainty and trade liberalization in international oligopoly (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1995068

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