Strategic Trade Policy, Spillovers, and the Uncertain Mode of

In this paper we discuss the incentives of a welfare maximizing government to implement strategic trade policy when there is, on the one hand, uncertainty about the relevant market information (like the type of competition, demand function, cost function, etc.), but, on the other hand, the environment of the contest between the firms is specific: there are two firms and the interaction among them is accompanied by technological spillovers from the domestic firm to the foreign firm. The two bench mark oligopoly models -- Bertrand and Cournot -- are assumed to be possible types of market competition. In order to analyse the problem of strategic policy under uncertainty, it is first necessary to work out in depth the optimal tariff policy in perfect information setup for both the Cournot and the Bertrand case. We argue, then, that the "informational" criticism of strategic trade policy is less relevant than was previously thought.Optimal tariff, Bertrand and Cournot competition, Spillovers, Strategic trade, Government's informational constraints, Social welfare

Strategic Trade Policy, the "Committed" versus "Non-Committed" Government, and R&D Spillovers

We compare the social welfare generated by a domestic government in the two types of policy setups: a "commitment" regime in which the government sets its policy instrument before the strategic choice is made by the domestic firm and a "non-commitment" regime where the policy variable is set after the strategic choice is made by the firm. The government conducts strategic trade policy in the form of optimal tariffs under which domestic and foreign firms compete in quantities in an imperfectly competitive domestic market where cost reducing R&D spillovers take place from the domestic to the foreign firm. We show that the "non-committed" government achieves generally a higher level of welfare and levies a lower optimal tariff than the "committed" government. Moreover, when the domestic government is allowed to use an R&D subsidy, that may or may not be accompanied by the optimal tariff, the resulting optimal subsidies are always positive.government commitment; optimal tariffs and subsides; technological spillovers; first–best versus second–best strategic policy

Strategic Trade Policy and Mode of Competition: Symmetric versus Asymmetric Information

In this paper, we analyze the following policy dilemma: strategic trade policy versus free trade when the domestic government is bound to intervene only after the domestic firm's strategic variable is chosen. This intervention allows the domestic firm to manipulate the domestic government and results in a socially inefficient choice of the strategic variable. However, commitment to free trade leads to forgoing the benefits from profit-shifting. Yet, from the social point of view, free trade may be optimal even under the assumption of symmetric information. Due to costly signaling, this result is reinforced in the case of asymmetric information.strategic trade policy, free trade, first-best versus second best policy, government's commitment, signaling

Strategic Trade Policy and Mode of Competition: Symmetric versus Asymmetric Information

In this paper, we analyze the following policy dilemma: strategic trade policy versus free trade when the domestic government is bound to intervene only after the domestic firm's strategic variable is chosen. This intervention allows the domestic firm to manipulate the domestic government and results in a socially inefficient choice of the strategic variable. However, commitment to free trade leads to forgoing the benefits from profit-shifting. Yet, from the social point of view, free trade may be optimal even under the assumption of symmetric information. Due to costly signaling, this result is reinforced in the case of asymmetric information.strategic trade policy; free trade; first-best versus second best policy; government's commitment; signaling

Persistence of Monopoly, Innovation, and R-and-D Spillovers: Static versus Dynamic Analysis

We build a dynamic duopoly model that accounts for the empirical observation of monopoly persistence in the long run. More specifically, we analyze the conditions under which it is optimal for the market leader in an initially duopoly setup to undertake pre-emptive R&D investment, ("strategic predation" strategy) that eventually leads to exit of the follower firm. The follower is assumed to benefit from the innovative activities of the leader through R&D spillovers. The novel feature of our approach is that we introduce explicit dynamic model and contrast it with its static counterpart. Contrary to the predictions of the static model, strategic predation that leads to persistence of monopoly is in general optimal strategy to pursue in a dynamic framework when spillovers are not largedynamic duopoly, R&D spillovers, persistence of monopoly, strategic predation, accommodation

Suppleness of the sheaf of algebras of generalized functions on manifolds

We show that the sheaves of algebras of generalized functions $\Omega\to \mathcal{G}(\Omega)$ and $\Omega\to \mathcal{G}^{\infty}(\Omega)$, $\Omega$ are open sets in a manifold $X$, are supple, contrary to the non-suppleness of the sheaf of distributions

Direct L2 Support Vector Machine

This dissertation introduces a novel model for solving the L2 support vector machine dubbed Direct L2 Support Vector Machine (DL2 SVM). DL2 SVM represents a new classification model that transforms the SVM\u27s underlying quadratic programming problem into a system of linear equations with nonnegativity constraints. The devised system of linear equations has a symmetric positive definite matrix and a solution vector has to be nonnegative. Furthermore, this dissertation introduces a novel algorithm dubbed Non-Negative Iterative Single Data Algorithm (NN ISDA) which solves the underlying DL2 SVM\u27s constrained system of equations. This solver shows significant speedup compared to several other state-of-the-art algorithms. The training time improvement is achieved at no cost, in other words, the accuracy is kept at the same level. All the experiments that support this claim were conducted on various datasets within the strict double cross-validation scheme. DL2 SVM solved with NN ISDA has faster training time on both medium and large datasets. In addition to a comprehensive DL2 SVM model we introduce and derive its three variants. Three different solvers for the DL2\u27s system of linear equations with nonnegativity constraints were implemented, presented and compared in this dissertation