Strategic trade policy under uncertainty

Research output: Journal PublicationsJournal Article (refereed)peer-review

15 Citations (Scopus)


This paper extends the Brander‐Spencer (1985) model by considering market uncertainty, exploring nonlinear policy, and examining firms' choices of strategic variables. By investigating the interrelationship between trade policy and market conduct, we find that unlike the often‐studied linear policy, a nonlinear policy can influence the domestic firm's choice of strategic variables and hence alter the market conduct in favor of the domestic country. Therefore, a nonlinear policy proves strictly superior to a linear one.
Original languageEnglish
Pages (from-to)75-85
Number of pages11
JournalReview of International Economics
Issue number1
Publication statusPublished - Feb 1995
Externally publishedYes

Bibliographical note

This paper is based on Qiu's first essay of his Ph.D. dissertation at the University of British Columbia. Financial support from the Hong Kong Research Grant Council (HKUST DAG93/94.BM13) is gratefully acknowledged.

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