Munich Personal RePEc Archive

Payoff interdependence and welfare-improving location diversification

Liu, Yi and Matsumura, Toshihiro (2024): Payoff interdependence and welfare-improving location diversification.

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We formulate a duopoly model with international location choice in the presence of global common ownership. We theoretically examine how payoff interdependence caused by overlapping ownership such as common and cross ownership affects location and production choices, and resulting welfare. We find that positive payoff interdependence enhances international location diversification, which may improve global welfare.

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