Information and disclosure in strategic trade policy: Revisited

Antoniou, Fabio and Tsakiris, Nikos (2011): Information and disclosure in strategic trade policy: Revisited.

Abstract

In a recent paper, Creane and Miyagiwa (2008) show that the mode of competition (quantity or price) determines whether information sharing occurs between firms and governments within an international duopoly context in which the fims are located in different countries. In this paper, we show that the relative number of firms located in each country is also critical. In particular, we illustrate that with quantity competition and under the presence of demand and cost uncertainty information sharing does not occur when the number of firms in one country is higher than the number of firms in the other country. Moreover, we show that the informational prisoner's dilemma in the current context appears only when the number of firms across countries is equal.

• Item Type: MPRA Paper
• Language: English
• Keywords: Information; uncertainty; strategic trade; multiple firms
• Subjects: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search ; Learning ; Information and Knowledge ; Communication ; Belief ; Unawareness

References

J. Brander, B. Spencer, Export Subsidies and International Market Share Rivalry, Journal of International Economics (1985) 16: 227-242.

R. Cooper, R. Riezman, Uncertainty and the Choice of Trade Policy in Oligopolistic Industries, Review of Economic Studies (1989) 56: 129-140.

A.Creane, K. Miyagiwa, Information and Disclosure in Strategic Trade Policy, Journal of International Economics (2008) 75: 229-244.

J. Eaton, G. M. Grossman, Optimal Trade and Industrial Policy under Oligopoly, The Quarterly Journal of Economics (1986) 101: 383-406.