Persistent protection in an international exit game

• 成果类型: Article
• 署名作者: Anis, AH; Benarroch, M; Wen, Q
• 署名单位: University of Winnipeg; St. Paul's Hospital; University of British Columbia; Vanderbilt University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(01)00126-X
• 发表日期: 2002
• 页码: 465-487
• 关键词: strategic trade policy; delay; declining demand; EXIT

摘要

This paper examines the strategic behavior of two countries in a duopoly exit game with declining demand in the export market. We consider whether countries have a strategic rational to maintain, rather than unilaterally or jointly reduce, their subsidies. Conditions under which persistent subsidization is justified from a national perspective are derived. By maintaining subsidies one country can gain a strategic advantage by forcing its rival to exit earlier. An outcome where only one country applies the subsidy is not attainable. Free trade is less likely to occur close to the end of the game. (C) 2002 Elsevier Science B.V. All rights reserved.