The scope for strategic asymmetry under international rivalry (2022)
Type of ContentJournal Article
In the context of a model of international trade through reciprocal dumping with horizontally differentiated goods, we study the endogenous choice of quantities and prices as strategic variables. We show that while a Cournot outcome prevails under conditions of export rivalry, strategic asymmetry under foreign direct investment rivalry may be observed, especially when it is possible to initially deter FDI by committing to a price contract, and when switching is costly and/or takes time.
CitationGilbert J, Koska OA, Oladi R (2022). The scope for strategic asymmetry under international rivalry. International Review of Economics & Finance.
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KeywordsExports vs. FDI; Horizontal Product Differentiation; Cournot-Bertrand-Nash Equilibrium
ANZSRC Fields of Research38 - Economics::3803 - Economic theory
35 - Commerce, management, tourism and services::3502 - Banking, finance and investment::350203 - Financial econometrics
RightsAll rights reserved unless otherwise stated
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