Simultaneous decisions or leadership in an international competition

In this paper, we study an international market with demand uncertainty. The model has two stages. In the first stage, the home government chooses an import tariff to maximize the revenue. Then, the firms engage in a Cournot or in a Stackelberg competition. The uncertainty is resolved between the decisions made by the home government and by the firms. We compare the results obtained in the three different ways of moving on the decision make of the firms.

ESEIG / Instituto Politécnico do Porto, Centro de Matemática da Universidade do Porto and the Programs POCTI and POCI by FCT and Ministério da Ciência, Tecnologia e do Ensino Superior.