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J. Peter Neary
Dermot Leahy



bertrand and cournot competition global subsidy discussion games strategic complements economics finance accounting national welfare

Multilateral Subsidy Games. CEPR Discussion Paper No. 6479 (2007)

Abstract This paper examines the rationale for multilateral agreements to limit investment subsidies. The welfare ranking of symmetric multilateral subsidy games is shown to depend on whether or not investment levels are "friendly", raising rival profits in total, and/or strategic complements, raising rival profits at the margin. In both Cournot and Bertrand competition, when spillovers are low and competition is intense (because goods are close substitutes), national welfare- maximizing governments will over-subsidize investment, and banning subsidies would improve welfare. When spillovers are high, national governments under-subsidize from a global welfare perspective, but the subsidy game is welfare superior to non-intervention.
Collections Ireland -> Maynooth University -> Subject = Social Sciences: Economics, Finance & Accounting
Ireland -> Maynooth University -> Academic Unit = Faculty of Social Sciences
Ireland -> Maynooth University -> Subject = Social Sciences
Ireland -> Maynooth University -> Academic Unit = Faculty of Social Sciences: Economics, Finance and Accounting
Ireland -> Maynooth University -> Status = Published
Ireland -> Maynooth University -> Type = Monograph
Ireland -> Maynooth University -> Open Access DRIVERset

Full list of authors on original publication

J. Peter Neary, Dermot Leahy

Experts in our system

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