Leahy, Dermot
(1999)
Learning by Doing,
Precommitment and
Infant-Industry Promotion.
Review of Economic Studies, 66.
pp. 447-474.
ISSN 0034-6527
Abstract
We examine the implications for strategic trade policy of different assumptions about precommitment
in a two-period Cournot oligopoly game with learning by doing. The inability of firms
and governments to precommit to future actions encourages strategic behaviour which justifies an
optimal first-period export tax relative to the profit-shifting benchmark of an export subsidy. In
the linear case the optimal subsidy is increasing in the rate of learning with government precommitment
but decreasing in it without, in apparent contradiction to the infant-industry argument.
Extensions to active foreign policy, distortionary taxation and Bertrand competition are also
considered.
| Item Type: |
Article
|
| Keywords: |
Learning; Doing;
Precommitment;
Infant-Industry; Promotion; |
| Academic Unit: |
Faculty of Social Sciences > Economics, Finance and Accounting |
| Item ID: |
8474 |
| Depositing User: |
Dermot Leahy
|
| Date Deposited: |
18 Jul 2017 14:35 |
| Journal or Publication Title: |
Review of Economic Studies |
| Publisher: |
Oxford University Press |
| Refereed: |
Yes |
| URI: |
|
| Use Licence: |
This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available
here |
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