NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Endogenous Market Structures in International Trade

Ignatius J. Horstmann, James R. Markusen

NBER Working Paper No. 3283
Issued in March 1990
NBER Program(s):   ITI   IFM

Almost all of the large literature on international trade with imperfect competition assumes exogenous market structures. The purpose of this paper is to develop a simple model that generates alternative market structures as Nash equilibria for different parameterizations of the basic model. Familiar configurations such as a duopoly competing in exports or a single multinational producing in both markets arise as special cases. Small tax-policy changes can produce large welfare effects as the equilibrium market structure shifts, implying discontinuous jumps in prices, quantities, and profits.

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Document Object Identifier (DOI): 10.3386/w3283

Published: Journal of International Economics, Volume 32, 1992, pp. 109-129

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