Strategic non-intervention and the choice of trade policy for international oligopoly Academic Article uri icon

abstract

  • This paper analyzes a game of strategic trade policy between governments who may choose among quantity controls, subsidies, and non-intervention as policy instruments. Central to the analysis is our view of non-intervention as a distinct policy choice. We derive conditions under which non-intervention is strictly preferred to the alternative instruments. Preferences between non-intervention and the Nash equilibrium subsidy confirm to a simple distance measure involving the Stackelberg leadership subsidy; the subsidy level (zero or Nash) that is closest to the Stackelberg subsidy being preferred. © 1993.

author list (cited authors)

  • Hwang, H., & Schulman, C. T.

citation count

  • 20

publication date

  • February 1993