Habit formation and strategic interactions: A new gain from trade? |
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| Authors: | Antoine Vatan |
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| Institution: | CREST-LMA, Timbre J360. 15 bd Gabriel Peri, 92245 Malakoff, France |
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| Abstract: | A two-period duopoly model of trade with habit formation displays a “pre-entry pro-competitive effect” and the standard pro-competitive effect once trade is effective. Both effects are driven in a different way by transport cost. A trade liberalization affects ambiguously welfare. |
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| Keywords: | F1 F12 |
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