Optimal Competition Policy for an Oligopolistic Export Industry

Abstract

This paper derives the optimal number of firms for an oligopolistic export industry when firms of the industry interact with each other in factor markets as well as in output markets. The optimal number is derived both for a case of unilateral intervention by an exporting country and for a Nash and a Stackelberg policy equilibria between governments of an exporting and an importing countries. It proves to be an increasing function of the ratio of the slope of an export supply curve to the absolute slope of an import demand curve. The nature of policy game between the governments also affects the optimal number of firms of the industry.