Implementation in Mixed Nash Equilibrium

Claudio Mezzetti & Ludovic Renou
Authors registered in the RePEc Author Service: Claudio Mezzetti

No 1146, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: We study the gains from trade in a model with endogenously variable markups. We show that the pro-competitive gains from trade are large if the economy is characterized by (i) extensive misallocation, i.e., large ineciencies associated with markups, and (ii) a weak pattern of cross-country comparative advantage in individual sectors. We and strong evidence for both of these ingredients using producer-level data for Taiwanese manufacturing establishments. Parameterizations of the model consistent with this data thus predict large pro-competitive gains from trade, much larger than those in standard Ricardian models. In stark contrast to standard Ricardian models, data on changes in trade volume are not sucient for determining the gains from trade.

Keywords: Implementation; Maskin monotonicity; pure and mixed Nash equilibrium (search for similar items in EconPapers)
JEL-codes: C72 D71 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2012
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://fbe.unimelb.edu.au/__data/assets/pdf_file/0010/784324/1146.pdf (application/pdf)

Related works:
Journal Article: Implementation in mixed Nash equilibrium (2012)
Working Paper: Implementation in Mixed Nash Equilibrium (2010)
Working Paper: Implementation in Mixed Nash Equilibrium (2009)
Working Paper: Implementation in Mixed Nash Equilibrium (2009)
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:mlb:wpaper:1146

Access Statistics for this paper

More papers in Department of Economics - Working Papers Series from The University of Melbourne Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Dandapani Lokanathan ().