Firm Heterogeneity and International Trade Liberalisation: A Generalized Cournot Oligopoly Approach

• Authors: Andrzej Cieślik

Abstracts

EN

The main goal of this article is to contribute to the theoretical analysis of international trade under imperfect competition using the Cournot oligopoly model with heterogeneous firms. In particular, our objective is to provide some insights into the role of cost asymmetry in studying the effects of trade liberalisation in the Cournot oligopoly framework. In order to introduce firm heterogeneity into the oligopoly model we use the generalised Cournot framework with asymmetric firms that differ in terms of their productivity, levels of output and market shares. We show that trade liberalisation leads to the elimination of less productive firms and results in lower equilibrium prices, higher sales per firm and lower markups in the industry.

Keywords

EN

Cournot oligopoly model; firm heterogeneity; imperfect competition; international trade liberalisation; market structure

• Publisher: Uniwersytet Warszawski. Wydawnictwo Naukowe Wydziału Zarządzania
• Journal: Central European Economic Journal
• Year: 2023
• Volume: 11
• Issue: 58
• Pages: 67-78

Dates

published

2024

Contributors

author

Andrzej Cieślik

• Uniwersytet Warszawski

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Identifiers

DOI

10.2478/ceej-2024-0007

Biblioteka Nauki

29431130