Type

Working Paper

Authors

J. Peter Neary
Dermot Leahy

Subjects

Economics

Topics
strategic trade policy r d subsidies dynamic consistency commitment research industrial l13 oligopolies industrial policy commercial policy export subsidies f12 research development info eu repo classification jel f12 info eu repo classification jel l13

International R&D rivalry and industrial strategy without government commitment (1995)

Abstract We examine optimal industrial and trade policies in a series of dynamic oligopoly games in which a home and a foreign firm compete in R&D and output. Alternative assumptions about the timing of moves and the ability of agents to commit intertemporally are considered. We show that the home export subsidy, R&D subsidy and welfare are higher in an equilibrium in which government commitment is credible than in the dynamically consistent equilibrium without commitment. Commitment yields gains but so does unanticipated reneging, whereas reneging which is anticipated by firms yields the lowest welfare of all.
Collections Ireland -> University College Dublin -> Economics Working Papers & Policy Papers
Ireland -> University College Dublin -> School of Economics
Ireland -> University College Dublin -> College of Social Sciences and Law

Full list of authors on original publication

J. Peter Neary, Dermot Leahy

Experts in our system

1
J. Peter Neary
University College Dublin
Total Publications: 79
 
2
Dermot Leahy
Maynooth University
Total Publications: 51