subcentre has low free flow transport costs but is easily congested (near city centre, access by road). The second one has … higher free flow transport costs but is less prone to congestion (ample public transport capacity, parking etc.). Both … the lower transport costs. The second policy option is to add congestion pricing (or parking pricing (etc.) for the …

-repeated game, the firms can collude over their FDI versus export decisions. Then, a reduction in trade costs may lead firms to … switch from exporting to undertaking FDI when trade costs are relatively high. Also, collusion over FDI may increase welfare …

concentration following episodes of integration. Welfare rises with trade liberalization, unless trade costs decline from a …

vertically differentiated good of higher quality, and costs that take the form of qualitydependent fixed costs for both the … intensifies price competition. This result carries through to the case of additional constant marginal costs, if this cost … marginal costs. In this latter case, the foreign firm will reduce output rather than quality, which tends to reduce foreign …

costs and quality-dependent costs of production and compete in quality and price in the domestic market. Quality …-dependent costs are quadratic in qualities, but independent of the quantities produced. The domestic government may impose a minimum …