Information and disclosure in strategic trade policy

Anthony Creane, Kaz Miyagiwa

Research output: Contribution to journalArticlepeer-review

12 Scopus citations

Abstract

We relax the standard assumption in the strategic trade policy literature that governments possess complete information about the economy. Assuming instead that governments must obtain information from firms, we examine firms' incentive to disclose information to the governments in the Brander-Spencer setting. With quantity competition, we find firms disclosing both demand and cost information, thereby justifying the literature's omniscient-government assumption. With price competition, however, firms have no incentives to disclose demand or cost information, so governments remain uninformed. Further, with quantity competition and unknown demand, governments are caught in an informational prisoner's dilemma.

Original languageEnglish
Pages (from-to)229-244
Number of pages16
JournalJournal of International Economics
Volume75
Issue number1
DOIs
StatePublished - May 2008

Keywords

  • F12
  • F13
  • Information
  • Learning
  • Prisoner's dilemma
  • Strategic trade
  • Uncertainty

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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