A Comment on 'The Loss from Trade Under International Cournot Oligopoly with Cost Asymmetry' by Dong and Yuan (2010)
5 Pages Posted: 29 Dec 2012
Date Written: October 27, 2012
This note corrects some oversights in Dong and Yuan (2010). We show, in particular, that their condition for intra-industry trade to reduce global welfare can never be satisfied. Using a new example, we demonstrate that, nevertheless, their fundamental insight remains correct: Under Cournot competition, trade can reduce global welfare when firms and countries are asymmetric.
Keywords: Trade, Imperfect Competition, Cournot, Asymmetry
JEL Classification: F12
Suggested Citation: Suggested Citation