Working Paper: CEPR ID: DP8172
Authors: Dermot Leahy; J. Peter Neary
Abstract: In this chapter we present a selective analytic survey of some of the main results of trade under oligopoly. We concentrate on three topics: oligopoly as an independent determinant of trade, as illustrated by the reciprocal-markets model of Brander (1981); oligopoly as an independent rationale for government intervention, as illustrated by strategic trade and industrial policy in the third-market model of Spencer and Brander (1983); and the challenges and potential of embedding trade under oligopoly in general equilibrium as illustrated by the GOLE model of Neary (2002).
Keywords: General oligopolistic equilibrium; Reciprocal dumping; Strategic trade policy
JEL Codes: F12; L13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| oligopolistic competition (L13) | intraindustry trade (F12) |
| trade costs (F19) | profits (L21) |
| trade costs (F19) | welfare (I38) |
| goods becoming more differentiated (L15) | volume of trade (F10) |
| foreign competition (F23) | home firm's pricing strategy (L11) |