Asymmetric oligopoly, international trade, and welfare: a synthesis |
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Authors: | Sajal Lahiri Yoshiyasu Ono |
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Institution: | (1) Present address: Department of Economics, University of Essex, CO4 3SQ Colchester, UK;(2) Present address: Department of Social Engineering, Tokyo Institute of Technology, Tokyo 152, Japan |
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Abstract: | This paper analyzes the relationship between market shares and welfare under the assumption of Cournot-oligopolistic interdependence in production. The model is general enough to deal with multiple countries, oligopolists with different levels of marginal costs within each country, and any distribution of world demand across countries. It is found that the elimination of a minor firm harms the country if the country's total production is very little. However, such a policy always benefits the country if it exports the commodity. The welfare effect of production subsidies and the case of foreign ownership of firms are also discussed. |
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Keywords: | international oligopoly entry-exit policy welfare |
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