the government incentive to impact on entry costs, and how entry subsidies can be used strategically in open economies. We … the monopoly pricing distortion. In the autarky equilibrium these subsidies trigger entry, but they eventually do not lead … to more but to better firms in the market. In the open economy there is another, strategic motive for entry subsidies as …

that emerge when countries non-cooperatively choose entry subsidies and their levels of basic research. We also …