Should governments help winners or losers?
Working paper

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Date
2007-10Metadata
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- Discussion papers (SAM) [667]
Abstract
One central result in the strategic trade literature is that governments
should not support domestic ”losers” but domestic ”winners”.
We show that when first-mover advantages are taken into account, the
reverse holds, governments have stronger incentives to support domestic
”losers” that face foreign ”winners”. Accordingly, governments can
play Stackelberg against foreign Stackelberg leaders to prevent them from playing Stackelberg against domestic Stackelberg followers.
Publisher
Norwegian School of Economics and Business Administration. Department of EconomicsSeries
Discussion paper2007:30