2018, Volume 71 - Issue 1
RSS feed citation: At RePEc
Publication date: 01 February 2018
THE POLITICAL CONNOTATION OF INTERNATIONAL TRADE AND GLOBALISATION: A COMMON MISUNDERSTANDINGRead the article
DOES WEAK MACROECONOMIC PERFORMANCE AFFECT VOTER TURNOUT? AN ANALYSIS ACCOUNTING FOR THE 'JOSHUA GENERATION EFFECT'Read the article
FIRMS CONTROLLED BY OWNERS AND MANAGERIAL FIRMS: THE 'STRATEGIC' TRADE POLICY GAME REVISITEDRead the article
Luciano FANTI, Department of Economics and Management, University of Pisa, Italy
Domenico BUCCELLA , Kozminsky University, Warsaw, Poland
This paper re-examines the strategic trade policy issue by considering a bargaining process over managerial contracts and different firms’ organizational structures; that is, either family ownership or atomistic shareholders whose board of directors delegate output choice to managers keep control over the firm. We show that, in contrast to the traditional results, a plethora of Nash equilibria emerges and the implementation of trade policies in both countries may be efficient (i.e. national social welfares are higher than under free trade) in the presence of a bargaining process in a sales delegation game. Such equilibria depend on the manager's bargaining power as well as the degree of product competition. The paper’s findings suggest that trade policy-makers should also take into account the ownership structure and the corresponding organizational form of the exporting firms.
F16, J51, L13
Export Subsidy/Tax, Prisoner's Dilemma, Managerial Delegation, Owner-Manager Bargaining, Cournot Duopoly
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