Endogenous Market Structures in International Trade

Ignatius Horstmann and James Markusen

No 3283, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Almost all of the large literature on international trade with imperfect competition assumes exogenous market structures. The purpose of this paper is to develop a simple model that generates alternative market structures as Nash equilibria for different parameterizations of the basic model. Familiar configurations such as a duopoly competing in exports or a single multinational producing in both markets arise as special cases. Small tax-policy changes can produce large welfare effects as the equilibrium market structure shifts, implying discontinuous jumps in prices, quantities, and profits.

Date: 1990-03
Note: ITI IFM
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Citations: View citations in EconPapers (108)

Published as Journal of International Economics, Volume 32, 1992, pp. 109-129

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