Strategic export policy, monopoly carrier, and product differentiation

Kazuhiro Takauchi

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines strategic subsidy/tax policy in a third-country market model with a monopoly carrier. To transport its product to the third market, each exporting firm must use the carrier. We show that under Cournot duopoly, the optimal policy is an export tax if the degree of product differentiation is large enough. In a Bertrand duopoly, the optimal policy is always the export tax. We also show that the subsidized firm's exports in the Cournot duopoly are larger than those in the Bertrand duopoly if the degree of product differentiation is small enough.

Keywords: Export subsidy/tax; Monopoly carrier; Product differentiation (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
Date: 2015-08-07
New Economics Papers: this item is included in nep-com and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:66003

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