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Home bias in multimarket cournot games

Roux, Catherine and Santos-Pinto, Luis and Thöni, Christian. (2016) Home bias in multimarket cournot games. European economic review, 89. pp. 361-371.

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Official URL: http://edoc.unibas.ch/44133/

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Abstract

We explore the role of trade costs for the home bias in trade. In a series of Cournot duopoly experiments with a home and an export market, we compare output choices when firms face different levels of trade costs. We find that there is two-way trade in identical products and that firms hold the majority market share in their home market. The resulting home bias turns out to be, however, stronger than that predicted by theory, and it even occurs without trade costs. Tacit collusion contributes to the home bias observed in our experiment but does not offer a full explanation for the phenomenon.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Industrial Organization and Regulation of Energy Markets (Roux)
UniBasel Contributors:Roux, Catherine
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Elsevier Science
ISSN:0014-2921
e-ISSN:1873-572X
Note:Publication type according to Uni Basel Research Database: Journal article
Identification Number:
Last Modified:16 Dec 2016 09:01
Deposited On:16 Dec 2016 09:01

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