Resource title

Competition for firms in an oligopolistic industry: do firms or countries have to pay?

Resource image

image for OpenScout resource :: Competition for firms in an oligopolistic industry: do firms or countries have to pay?

Resource description

We set up a model of generalised oligopoly where two countries of different size compete for an exogenous, but variable, number of identical firms. The model combines a desire by national governments to attract internationally mobile firms with the existence of location rents that arise even in a symmetric equilibrium where firms are dispersed. As economic integration proceeds, equilibrium taxes decline, switching from positive to negative levels, and then rise as trade costs fall even further. A range of trade costs is identified where economic integration raises the welfare of the small country, but lowers welfare in the large country.

Resource author

Andreas Haufler, Ian Wooton

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26021

Resource license

Adapt according to the presented license agreement and reference the original author.