International overhead cost sharing

Helmut Zink

No 343, Discussion Papers, Series II from University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy"

Abstract: In this paper I investigate the effect of different stages of international trade on market structure and prices when production involves overhead cost, markets are intransparent, and customers have to search for offers. I show that two stages have to be distinguished: a first stage where each firm can offer its product in any country but customers cannot search in foreign countries and a second stage where each firm can offer in any country and each customer can search and buy in any country. In particular I investigate who benefits if one country increases its degree of market transparency and who benefits if the second stage of international trade is introduced.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:kondp2:343

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