Title

Unionized Bertrand Duopoly and Strategic Export Policy

Abstract

The paper reports that an export subsidy is optimal for a unionized Bertrand duopoly. Following results published by Brander and Spencer (Journal of International Economics, 1988, pp. 217-34), this establishes the robustness of export subsidization to the mode of competition (Cournot or Bertrand), and contrasts with nonunion results in the literature. If both firms are unionized and both governments pursue active trade policies, a subsidy remains optimal except for a narrow range of extreme substitutability between products. Nations with a lower opportunity cost of labor employ more aggressive policies in equilibrium.

Department(s)

Economics

Keywords and Phrases

competition; export; trade policy; trade union

International Standard Serial Number (ISSN)

0965-7576; 1467-9396

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2000 Blackwell Publishing Ltd, All rights reserved.

Publication Date

01 Feb 2000

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