DP8172 Oligopoly and Trade

Author(s):	Dermot Leahy, J Peter Neary
Publication Date:	December 2010
Keyword(s):	GOLE (General Oligopolistic Equilibrium), reciprocal dumping, strategic trade policy
JEL(s):	F12, L13
Programme Areas:	International Trade and Regional Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=8172

In this chapter we present a selective analytic survey of some of the main results of trade under oligopoly. We concentrate on three topics: oligopoly as an independent determinant of trade, as illustrated by the reciprocal-markets model of Brander (1981); oligopoly as an independent rationale for government intervention, as illustrated by strategic trade and industrial policy in the third-market model of Spencer and Brander (1983); and the challenges and potential of embedding trade under oligopoly in general equilibrium as illustrated by the GOLE model of Neary (2002).