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International R&D Rivalry and Industrial Strategy / Barbara J. Spencer, James A. Brander.
- Format:
- Book
- Author/Creator:
- Spencer, Barbara J.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w1192.
- NBER working paper series no. w1192
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1983.
- Summary:
- This paper presents a theory of government intervention which provides an explanation for "industrial strategy" policies such as R&D or export subsidies in imperfectly competitive international markets. Each producing country has an incentive to try to capture a greater share of rent-earning industries using subsidies, but the subsidy-ridden international equilibrium is jointly suboptimal. The equilibrium in the strategic game involving firms and governments is modelled as a three stage subgame perfect Nash equilibrium. The assumption that the government is the first player in this game allows it to influence equilibrium industry outcomes by altering the set of credible actions open to firms.
- Notes:
- Print version record
- August 1983.
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