Two-stage game models of international oligopoly

This paper reexamines the import protection as export promotion thesis in a series of two-stage games in which firms choose R&D and/or capacity in the first stage and quantity or price in the second. It is shown that a tariff affects exports in two ways; firstly, if marginal cost is increasing, by raising home sales directly it crowds out exports; secondly by increasing R&D and/or capacity it raises exports indirectly. Prospects for export enhancing protection are compared for different games and shown to be better in the long run than in the short run.

A hard copy is available in UCD Library at GEN 330.08 IR/UNI