A two-country model of the FDI versus export decisions of firms is analysed. The analysis considers both the Cournot duopoly and the Bertrand duopoly models with differentiated products. It is shown that the static game is often a prisoners' dilemma where both firms are worse off when they both...

A two-country model of the FDI versus export decisions of firms is analysed. The analysis considers both the Cournot duopoly and the Bertrand duopoly models with differentiated products. It is shown that the static game is often a prisoners' dilemma where both firms are worse off when they both...

The result of Colombo and Labrecciosa [Colombo, Luca and Labrecciosa, Paola (2006). 'The suboptimality of optimal punishments in Cournot supergames', Economics Letters 90, pp. 116-121.] that optimal punishments are inferior to Nash-reversion trigger strategies with decreasing marginal costs is...

Assuming constant marginal cost, it is shown that a switch from specific to ad valorem taxation has no effect on the critical discount factor required to sustain collusion. This result is shown to hold for Cournot oligopoly as well as for Bertrand oligopoly when collusion is sustained with...