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Author: Stephen Jui-Hsien Chou Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper studies the optimal export policy in the context of a vertically related industry with differentiated products, and analyzes the effects of the degree of product substitutability and market structure on the determination of such a policy. It is shown that the results obtained in a similar model with homogeneous goods rivalry no longer hold when the goods are differentiated. Indeed, the degree of product substitutability plays an important role in the determination of export policies, and also determines whether a country can be better off under a trade policy war compared to free trade. The use of a differentiated product setting also allows one to compare export policies and countries' welfare levels under both Cournot and Bertrand competition. It is found that the results of the comparison are also sensitive to the degree of product substitutability.
Author: Stephen Jui-Hsien Chou Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This paper studies the optimal export policy in the context of a vertically related industry with differentiated products, and analyzes the effects of the degree of product substitutability and market structure on the determination of such a policy. It is shown that the results obtained in a similar model with homogeneous goods rivalry no longer hold when the goods are differentiated. Indeed, the degree of product substitutability plays an important role in the determination of export policies, and also determines whether a country can be better off under a trade policy war compared to free trade. The use of a differentiated product setting also allows one to compare export policies and countries' welfare levels under both Cournot and Bertrand competition. It is found that the results of the comparison are also sensitive to the degree of product substitutability.
Author: Luca Lambertini Publisher: Edward Elgar Publishing ISBN: 9781781958315 Category : Business & Economics Languages : en Pages : 240
Book Description
'This is a high-quality book on an important and central topic in the theory of industrial organisation. It is a cohesive and extremely well written volume which is destined to become a standard work on the subject.' - Mark Casson, University of Reading, UK This original new book offers a comprehensive and engaging perspective on the theory of vertical differentiation. It enables the reader to grasp the key concepts and effects that product quality has both on firms' behaviour and market structure, and the ways in which this relationship has evolved. With contributions from prominent figures in the field, the book investigates a number of important topics, such as the choice of the optimal product range, profit sharing, the existence of equilibrium in duopoly games, positional effects attached to status goods, international trade, collusion, advertising and the dynamics of capital accumulation for quality improvement and product innovation. Using both static and dynamic approaches, these aspects are assessed in relation to the manifold issues of regulation, competition policy and trade policy. Product differentiation and its influence on consumer behaviour and the performance of firms is a core topic in the existing literature in the fields of industrial organization, international trade and economic growth. This book will be an essential read for researchers, students and professional scholars working in these areas, especially those with an interest in antitrust regulation.
Author: John Beath Publisher: Cambridge University Press ISBN: 9780521335522 Category : Business & Economics Languages : en Pages : 220
Book Description
There are few industries in modern market economies that do not manufacture differentiated products. This book provides a systematic explanation and analysis of the widespread prevalence of this important category of products. The authors concentrate on models in which product selection is endogenous. In the first four chapters they consider models that try to predict the level of product differentiation that would emerge in situations of market equilibrium. These market equilibria with differentiated products are characterised and then compared with social welfare optima. Particular attention is paid to the distinction between horizontal and vertical differentiation as well as to the related issues of product quality and durability. This book brings together the most important theoretical contributions to these topics in a succinct and coherent manner. One of its major strengths is the way in which it carefully sets out the basic intuition behind the formal results. It will be useful to advanced undergraduate and graduate students taking courses in industrial economics and microeconomic theory.
Author: Winston W. Chang Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The paper introduces the conjectural variations and bargaining approaches into a vertical model, wherein a foreign upstream firm supplies one input to two downstream firms that produce differentiated products for the export market. Various downstream firms' competition modes and upstream's pricing schemes emerge as special cases of this formulation. The authors show that the optimal export policy of a downstream country depends crucially on the downstream firms' conjectures of rivals' responses, the upstream firm's pricing schemes, their relative bargaining powers, and the degree of product differentiation. If the upstream's pricing or bargaining power is strong (weak) and if the downstream's degree of competition is high (low), a tax (subsidy) is optimal owing to a strong (weak) vertical profit-shifting effect and a weak (strong) horizontal effect.
Author: Fang-yueh Chen Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
We examine the home country tariff and subsidy policies when a domestic firm uses an imported key input to produce its low-quality exports, and foreign firms produce high-quality exports as well as the key input. We show that the decisions of foreign vertically integrated firms on strategy regarding input supply depend on the tariff-inclusive and quality-adjusted comparative advantage between countries. We prove that the home country's optimal policy is to tax either its goods exports or its key input imports. We also show that without vertical integration, if and only if goods are not very quality-differentiated, the home country should subsidize either its goods exports and/or its key input imports.
Author: Daniel Pick Publisher: Routledge ISBN: 0429721196 Category : Political Science Languages : en Pages : 326
Book Description
This book is based on the proceedings of a conference held in June 1996 under co-sponsorship of the International Agricultural Trade Consortium and The Retail Food Industry Center. The International Agricultural Trade Research Consortium (lA TRC) is a group of 160 economists from 16 countries who are interested in fostering research relating to international trade of agricultural products and commodities and providing a forum for the exchange of ideas. Each summer the IATRC sponsors a symposium on a topic relating to trade and trade policy from which proceedings are published. A list of past symposia and related publications may be obtained from Laura Bipes, IATRC Executive Director, Department of Applied Economics, University of Minnesota, St. Paul, Minnesota 55108.
Author: Winston Chang Publisher: Springer Science & Business Media ISBN: 1461522498 Category : Business & Economics Languages : en Pages : 276
Book Description
A theoretical analysis of international trade and industrial policy, developing and using new models of trade with imperfect competition. Modeling of imperfect competition within international trade has been difficult until recent breakthroughs in this area, which have provided a more realistic view of the world economy. The book builds on the advances provided by such tools as game theory and the theory of monopolistic competition. The first section covers broad and basic trade issues which arise under imperfect competition. Section two examines implications for trade policy covering issues such as strategic trade policy in static and dynamic settings. Section three deals with various structural issues, such as optimal choice of trade liberalizing policies, the formation of trade blocks, and open dualistic economy with externalities.
Author: Brandon James Hoffman Publisher: ISBN: Category : Languages : en Pages : 182
Book Description
This is a collection of essays on the topic of vertical markets and resellers. The first two chapters look at the effects of mandatory dealer laws on prices and profits in vertical markets with differentiated goods. The third chapter looks at the quality of products chosen when manufacturers use resellers compared to when they do not. All three chapters show that competition is lessened when mandatory dealer laws exist. Chapter 1 addresses the US automobile market which has laws in almost every state that require sales of new vehicles go through franchised dealers, and manufacturers are not allowed to sell directly to consumers. While vertical markets can provide many benefits to both producer and consumer alike, double-marginalization is often seen as a problem for producers and consumers with vertical markets; whereby firms on different levels both have market power and thus are both able to charge a markup over cost. Contracts and implicit agreements can mitigate or lessen the negative externality associated with double-marginalization, but I develop a model to show that double-marginalization can be a good thing for producers, while simultaneously being bad for consumers. The model has a single dimension on product differentiation and different levels of vertical markets. In this model, firms either sell to consumers or other firms. How far removed the manufacturer of the good is from the final consumer determines the number of vertical markets. A market with one level consists of a manufacturer who sells directly to consumers, while a market with two levels consists of a manufacturer who sells to a reseller who in turn sells to consumers. I find that the profits of the manufacturer of the good can be up to three times as high when there are two levels instead of one and that they will always be at least twice as high. This model also shows that manufacturers can benefit from the existence of a law that requires they use dealers, even though any one single manufacturer has an incentive to not use a dealer. Chapter 2 addresses mandatory dealer laws in a setting without perfectly inelastic demand. Under a certain set of circumstances, manufacturers can earn higher profits after the introduction of these mandatory dealer laws than they would be without them. In this chapter, I remove the perfectly inelastic total demand restriction, and instead show how the elasticity of total demand plays a role in a manufacturer's preference for a mandatory dealer law. For the model used in this paper, I find that total demand does not need to be very inelastic at all, and in fact, can be elastic at the equilibrium prices and quantities. The findings in this paper run contrary to expectation, where double-marginalization is something that hurts manufacture's profits. In chapter 3, I analyze the benefit of moving first in a vertically differentiated market with manufacturers and retailers. Both retailers and manufactures are assumed to be profit-maximizing entities. Here the choice of the incumbent manufacturer creates an indifference between entering with a higher quality or entering with a lower quality for the entering manufacturer. Entry-quality decisions and wholesale pricing are related to the competition of retailers selling the manufacturers product and the degree of consumers' taste for quality. I examine the indifference of the entering manufacturer and highlight the benefits of being able to set quality first as an incumbent manufacturer when pricing stages are simultaneous. Stackelberg competition in the quality stage allows for the possibility for inferior-quality entry as well as superior-quality entry. The first-mover advantage dominates the high-quality advantage in this setting which is consistent with my findings in the dock and boat-lift markets.
Author: Moriki Hosoe Publisher: Springer ISBN: 981131876X Category : Business & Economics Languages : en Pages : 238
Book Description
This book analyzes the various problems of growth, trade and public policy from the perspective of applied economics, based on research in areas such as public policies, trade and regulation, and development economics. Part 1 investigates the broad problems of growth and regional economy, focusing on economic developments in Japan and Korea. Part 2 discusses trade and foreign investment in Japan, mainly on an empirical basis. Part 3 then examines various public economic policies using applied analysis tools. The papers in this volume have been collected to commemorate ten years of academic exchange between the Japan Association for Applied Economics (JAAE) and the Korean Economics and Business Association (KEBA), and include an applied economic analysis of growth and trade in Korea and Japan.
Author: Stephen Jui-Hsien Chou
Author: Stephen Jui-Hsien Chou
Author: Luca Lambertini
Author: John Beath
Author: Winston W. Chang
Author: Fang-yueh Chen
Author: Daniel Pick
Author: Winston Chang
Author: Brandon James Hoffman
Author: Moriki Hosoe
Author: George Norman