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This paper explicitly takes into account the dynamic oligopolistic rivalry among source producers to evaluate the degree of exchange rate pass-through. Using recent time-series techniques for the case of imported automobiles in Switzerland, the results show that prices are strategic complements...

This paper investigates the effects of reciprocal tariff reductions in a two-identical country model of product differentiation. It makes three points. First, the existing results about market structure effects of trade liberalization can easily be replicated from a one-dimensional...

The authors argue that the rationalization gains often predicted by static applied general equilibrium models with imperfect competition and scale economies are artificially boosted by an unrealistic treatment of fixed costs. They introduce sunk costs into one such model calibrated with...

Using the Hotelling approach to product differentiation, this article derives the equilibrium product configurations and prices when two firms enter and sell in two interdependent markets separated by barriers to trade. It shows that product imitation and no trade as well as product...