Time consistency, learning by doing and infant-industry protection: The linear case
Citation:Leahy, Dermot; Neary, J. Peter. 'Time consistency, learning by doing and infant-industry protection: The linear case'. - Economic & Social Review, Vol. 26, No. 1, October, 1994, pp. 59-68, Dublin: Economic & Social Research Institute
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This paper examines the implications for strategic trade policy of diiferent assumptions about precommitment in a dynamic oligopoly game with learning by doing. Assuming that demands are linear, we find that the optimal first-period subsidy is increasing in the rate of learning with precommitment but decreasing in it if the government cannot precommit to future subsidies. The infant-industry argument is thus reversed in the absence of precommitment.
Publisher:Economic & Social Studies
Type of material:Journal Article
Availability:Full text available