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This paper presents a conjectural variation approach to demonstrate that competing firms will often distort their cost structures away from strict cost minimization for strategic reasons. In particular, it is shown that the nature of the desired distortions of production technology depends critically on the magnitudes of the firms' conjectural variations with respect to outputs as well as the firms' conjectural variations with respect to technology. These results are in sharp contrast to the conventional wisdom based on monopolized or perfectly competitive markets.

This paper departs from earlier work on location theory by introducing external economies of scale into the Weber–Moses location model. It is shown that under Cournot–Nash competition, when external economies prevail, constant returns to scale at the firm level is not a sufficient condition for ensuring the invariance of the firm's optimal location with respect to a change in market demand, regardless of whether or not free entry is allowed. Moreover, when free entry is allowed and the production function exhibits decreasing returns to scale, but with very strong external economies, the optimal location moves towards or away from the market as demand increases according to whether the demand function is convex or concave. These results are different significantly from the conventional wisdom.

Abstract
This paper compares market profit and social welfare levels between differentiated Bertrand and Cournot duopoly. We start with a basic model in which a firm with a production technology can license its new technology to a potential rival who can use the technology to produce a differentiated product and compete with the incumbent firm. It is found that for any given technology level, Bertrand competition is necessarily more profitable but less socially desirable, due to its higher royalty rate. By contrast, if the licensee firm is an incumbent firm, the results hold if the technology level is high. Furthermore, if we assume the licensor firm can engage in product innovation and choose its optimal technology endogenously and the R&D efficiency is high (low), the welfare ranking is reversed (still holds).

AbstractThis note shows that there is no interior solution in Mai and Hwang's oligopolistic location model with free entry when the sum of external economies scale and the degree of returns‐to‐scale is one or less than one. Furthermore, the shape of the demand function plays a key role in the determination of the oligopolistic firm's plant location.

Abstract.  This paper develops a generalized three‐country model with downstream and upstream industries to analyze optimal import and export trade policies in the presence of monopoly distortion in a foreign intermediate input market. It shows that the import tariff and export tax are linearly dependent. Thus, the optimal choice of the tariff gives rise to the same results as the optimal choice of the export tax, which implies that the domestic government, to avoid tariff retaliation, can use export tax as a substitute for the import tariff.