Topic: Foreign Penetration and Domestic Competition
Speaker: Sajal Lahiri, Southern Illinois University (co authored with Yingyi Tsai, National University of Kaohsiung)
Date: 10.2.2015
Time: 2 p.m.
Venue: Room 32, Department of Economics, Calcutta University
Abstract
We consider an oligoplistic model with a number of domestic and and a number of foreign firms, and free entry and exit of domestic firms. The two sets of firms produce differentiated goods and serve the domestic market. They incur fixed costs of production. In this context, we examine, inter alia, the effect of an increase in the number of foreign firms on: (i) the free entry number of domestic firms, and (ii) the optimal number of domestic firms. We also examine optimal subsidy policy for foreign firms when there is free entry and exit of both sets of firms.