Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159320
Authors: 
Colombo, Luca
Lambertini, Luca
Mantovani, Andrea
Year of Publication: 
2003
Series/Report no.: 
Quaderni - Working Paper DSE 479
Abstract: 
We investigate a dynamic Cournot duopoly with intraindustry trade, where firms invest in R&D to reduce the level of iceberg transportation costs. We adopt both open-loop and closed-loop equilibrium concepts, showing that a unique (saddle point) steady state exists in both cases. In the open-loop model, optimal investments and the resulting efficiency of transportation technology are independent of the relative size of the two countries. On the contrary, in the closed-loop case, a home market effect operates so that the firm located in the larger country invests more than the rival located in the smaller one. Policy implications are also evaluated.
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/3.0/
Document Type: 
Working Paper
Social Media Mentions:

Files in This Item:
File
Size
244.7 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.