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Limited By:	Subject = GOLE (General Oligopolistic Equilibrium);

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Marked Mark

Competitive versus comparative advantage (2009)

Neary, J. Peter

Competitive versus comparative advantage (2009)

Neary, J. Peter

Abstract:

I explore the interactions between comparative, competitive and absolute advantage in a two-country model of oligopoly in general equilibrium. Comparative advantage always determines the direction of trade, but both competitive and absolute advantage affect resource allocation, trade patterns and trade volumes. Competitive advantage in the sense of more home firms drives foreign firms out of marginal sectors but also makes some marginal home sectors uncompetitive. Absolute advantage in the sense of a uniform fall in home costs tends to raise home output in all sectors but also leads both countries to specialise less in accordance with comparative advantage.
Economic and Social Research Council (ESRC)

http://hdl.handle.net/10197/1325

Marked Mark

Cross-border mergers as instruments of comparative advantage (2009)

Neary, J. Peter

Cross-border mergers as instruments of comparative advantage (2009)

Neary, J. Peter

Abstract:

A two-country model of oligopoly in general equilibrium is used to show how changes in market structure accompany the process of trade and capital market liberalisation. The model predicts that bilateral mergers in which low-cost firms buy out higher-cost foreign rivals are profitable under Cournot competition. With symmetric countries, welfare may rise or fall, though the distribution of income always shifts towards profits. The model implies that trade liberalisation can trigger international merger waves, in the process encouraging countries to specialise and trade more in accordance with comparative advantage.
European Commission

http://hdl.handle.net/10197/1294

Marked Mark

Endogenous mode of competition in general equilibrium (2009)

Neary, J. Peter; Tharakan, Joe

Endogenous mode of competition in general equilibrium (2009)

Neary, J. Peter; Tharakan, Joe

Abstract:

This paper endogenises the extent of intra-sectoral competition in a multi-sectoral model of oligopoly in general equilibrium. Firms choose capacity followed by prices. If the benefits of capacity investment in a given sector are below a threshold level, the sector exhibits Bertrand behaviour,otherwise it exhibits Cournot behaviour. By endogenising the threshold parameter in general equilibrium, we show how exogenous shocks alter the mix of sectors between "more" and "less" competitive, or Bertrand and Cournot. The model also has implications for the effects of trade liberalisation and technological change on the relative wages of skilled and unskilled workers.
Irish Research Council for the Humanities and Social Sciences ; European Commission

http://hdl.handle.net/10197/1301

Marked Mark

Globalisation and market structure (2009)

Neary, J. Peter

Globalisation and market structure (2009)

Neary, J. Peter

Abstract:

This paper reviews some puzzling economic aspects of globalisation and argues that they cannot be satisfactorily addressed in perfectly or monopolistically competitive models. Drawing on recent work, a model of oligopoly in general equilibrium is sketched. The model ensures theoretical consistency by assuming that firms are large in their own markets but small in the economy as a whole, and ensures tractability by assuming quadratic preferences defined over a continuum of goods. Applications considered include the effects of trade liberalisation on industrial structure, on cross-border merger waves, and on the distribution of income between skilled and unskilled workers.

http://hdl.handle.net/10197/1306

Marked Mark

Oligopoly and Trade (2010)

Leahy, Dermot; Neary, Peter

Oligopoly and Trade (2010)

Leahy, Dermot; Neary, Peter

Abstract:

In this chapter we present a selective analytic survey of some of the main results of trade under oligopoly. We concentrate on three topics: oligopoly as an independent determinant of trade, as illustrated by the reciprocal-markets model of Brander (1981); oligopoly as an independent rationale for government intervention, as illustrated by strategic trade and industrial policy in the third-market model of Spencer and Brander (1983); and the challenges and potential of embedding trade under oligopoly in general equilibrium as illustrated by the GOLE model of Neary (2002).

http://mural.maynoothuniversity.ie/2316/

Marked Mark

The road less travelled : oligopoly and competition policy in general equilibrium (2010)

Neary, J. Peter

The road less travelled : oligopoly and competition policy in general equilibrium (2010)

Neary, J. Peter

Abstract:

I review previous approaches to modelling oligopoly in general equilibrium, and propose a new view which in principle overcomes their deficiencies: modelling firms as large in their own market but small in the economy as a whole. Implementing this approach requires a tractable specification of preferences. Dixit-Stiglitz preferences (which imply iso-elastic perceived demand functions) could be used, but "continuum-quadratic" preferences (which imply linear perceived demand functions) are more convenient. To illustrate their usefulness, I construct a simple closed-economy model of oligopoly in general equilibrium and derive some surprising implications for competition policy.

http://hdl.handle.net/10197/1860