The result of Colombo and Labrecciosa [Colombo, Luca and Labrecciosa, Paola (2006). 'The suboptimality of optimal punishments in Cournot supergames', Economics Letters 90, pp. 116-121.] that optimal punishments are inferior to Nash-reversion trigger strategies with decreasing marginal costs is...

A Cournot duopoly model is used to explain the paradox that multilateral trade liberalisation has resulted in increases in both the volume of world trade and the amount of foreign direct investment (FDI).