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Learning by Doing, Precommitment and Infant-Industry Protection.

Abstract:

This paper examines the implications for strategic trade policy of different assumptions about precommitment. In a dynamic oligopoly game with learning by doing, the optimal first-period subsidy is lower if firms cannot precommit to future output than if they can; and is lower still if the government cannot precommit to future subsidies. In the linear case the optimal subsidy is increasing in the rate of learning with precommitment, but decreasing in it if the government cannot precommit. The...

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Publisher:
CEPR
Host title:
C.E.P.R.Discussion Papers
Series:
C.E.P.R.Discussion Papers
Volume:
980
Publication date:
1994-01-01
Paper number:
980
Language:
English
UUID:
uuid:f7f13f35-f75f-4884-95cb-7d46fe8b13dc
Local pid:
oai:economics.ouls.ox.ac.uk:11707
Deposit date:
2011-08-16

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