Working Paper: NBER ID: w1843
Authors: Kala Krishna; Motoshige Itoh
Abstract: In oligopolistic situations content protection can have unexpected effects as it changes the nature of interactions between input suppliers. With a duoply, it does so in a manner that makes the foreign firm wish to match price increases and decreases of the domestic firm. Domestic input suppliers can therefore lose from such policies, even when set at free trade levels. The relation between input demands, the form of protection, and the degree of substitution between inputs is shown to define the effects of content protection and to provide the basis for understanding who might lobby for protection in different environments.
Keywords: Content Protection; Oligopoly; International Trade
JEL Codes: F13; L13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| content protection (O34) | domestic input suppliers' profits (D22) |
| form of protection (D18) | domestic input suppliers' profits (D22) |
| degree of substitution between inputs (E23) | domestic input suppliers' profits (D22) |
| content protection (O34) | input demand (J23) |
| content protection (O34) | firm interactions (L14) |
| c effect (Y60) | domestic input suppliers' profits (D22) |
| i effect (Y60) | domestic input suppliers' profits (D22) |
| n effect (Q51) | domestic input suppliers' profits (D22) |