Lambertini, Luca
(1995)
Intraindustry Trade Under Vertical Product Differentiation.
Bologna:
Dipartimento di Scienze economiche DSE,
p. 31.
DOI 10.6092/unibo/amsacta/5080.
In: Quaderni - Working Paper DSE
(233).
ISSN 2282-6483.
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Abstract
The paper focuses on trade between two countries where a vertically differentiated commodityis produced by a single firm in each country, operating initially in autarkic conditions. It is assumed that the two countries have overlapping income distributions, giving thus rise, under certain conditions, to two-way trade, i.e., a proper intraindustry trade. It emerges that while consumers always benefit from trade, especially if two-way trade arises, firms may have conflicting preferences on the choice between (i) autarky and trade, as well as (ii) one-way trade and two-way trade.
Abstract