In recent years empirical studies offer clear evidence on the increasing importance of intra-industry trade in presence of vertically differentiated products. These are goods that, within the same industry, are distinguished by different quality levels. In the new trade theory and in the...

This paper presents a model of collusion in vertically differentiated industries where firms have the option to make their products distinguishable to consumers by attaching a brand. We show that if consumers’ preferences are linear in the quality dimension and their beliefs satisfy a standard...

The distribution of consumer incomes is a key factor in determining the structure of a vertically differentiated industry when consumer's willingness to pay depends on his income. This paper computes the Shaked and Sutton (1982) model for a general specification of consumers' income distribution...

This paper provides a critical analysis of the World Bank’s new thinking on industrial policy. After outlining the changing perspectives on industrial policy put forward by the World Bank over the last three decades, we argue that the bank’s economists have taken one step forward (the...

Abstract This paper provides a critical analysis of the World Bank’s new thinking on industrial policy. After outlining the changing perspectives on industrial policy put forward by the World Bank over the last three decades, we argue that the bank’s economists have taken one step forward...

The industry and trade policy regimes in India have witnessed drastic changes since 1991. The dismantling of the industrial licensing system and thereby allowing free entry to and exit from the industry of firms in 1991 followed by the WTO induced trade liberalization leading to substantial...

We discuss competition effects and possible regulation of vertical integration in internet-based two-sided markets against the background of the ongoing antitrust allegations against Google. In such markets, network effects and economics of scale often lead to dominating companies which are...

The article examines a differentiated-products duopoly model where the firms make entry decisions to two markets and then choose prices. The effects of product differentiation and entry costs are analyzed in two games: with and without price discrimination between the markets. Allowing price...

We investigate government subsidy policies in which a home firm and a foreign firm choose to strategically set prices or quantities in a third market. We show that even though each firm can earn higher profits under Cournot competition than under Bertrand competition regardless of the nature of...

To consider the role of uncertain production cost resulting from complying with rules of origin (ROO), we formulate a Cournot oligopoly model of a free trade area (FTA). If exporters do not comply with ROO, they must pay an external tariff, and if they comply, they enjoy zero tariff but suffer...