Uncertainty and the Choice of Trade Policy in Oligopolistic Industries
研究两个国家政府在不确定环境下，如何在直接数量管制和补贴之间选择贸易政策，以帮助本国不完全竞争企业获利。结果发现，确定环境下两国都选数量管制，不确定性足够大时则都选补贴。
This paper investigates the design of trade policies in an uncertain world. Governments in each of two countries select between direct quantity controls and subsidies in an attempt to shift profits in favour of domestic, imperfectly competitive firms. The equilibrium of this bilateral policy game depends critically on the variability of the environment. In a world of certainty, both governments would choose to regulate the behaviour of their firms through direct quantity controls. With a sufficient amount of uncertainty, both governments regulate their firms through subsidies. This result reflects an important tradeoff between the strategic advantages of direct quantity controls and flexibility gained by the use of subsidies