Reciprocal Dumping with Product Differentiation
This paper examines if international trade can reduce total welfare in an international oligopoly with differentiated goods. We show that intra-industry trade, i.e. "reciprocal dumping," can result in lower total surplus than autarky in a Cournot model for any degree of product differentiation. Moreover, trade can reduce welfare compared to autarky in a Bertrand model when the local markets are sufficiently competitive and products are sufficiently close substitutes. Otherwise it unambiguously increases welfare. Copyright © 2008 The Authors. Journal compilation © 2008 Blackwell Publishing Ltd.
Year of publication: |
2008
|
---|---|
Authors: | Friberg, Richard ; Ganslandt, Mattias |
Published in: |
Review of International Economics. - Wiley Blackwell, ISSN 0965-7576. - Vol. 16.2008, 5, p. 942-954
|
Publisher: |
Wiley Blackwell |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Reciprocal Dumping with Bertrand Competition
Friberg, Richard, (2005)
-
An empirical assessment of the welfare effects of reciprocal dumping
Friberg, Richard, (2006)
-
E-commerce and prices: Theory and evidence
Friberg, Richard, (2000)
- More ...