Implementing Market Access

Posted: 10 Sep 1996

See all articles by Kala Krishna

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Suddhasatwa Roy

California State University, Fullerton - Department of Economics

Marie C. Thursby

Georgia Institute of Technology - Strategic Management Area; National Bureau of Economic Research (NBER)

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Abstract

This paper examines ex post subsidies as a means of enforcing market share targets. Subsidies set after firms make their strategic decisions are shown to create powerful incentives for firms to raise prices. These effects are stronger when targets, and hence, subsidies, are specified on a firm-specific rather than industry-wide basis. This occurs because firms perceive themselves as subject to more competition (i.e., more elastic demand) in the latter case.

JEL Classification: F13, H32, H87

Suggested Citation

Krishna, Kala and Roy, Suddhasatwa and Thursby, Marie C., Implementing Market Access. Available at SSRN: https://ssrn.com/abstract=4201

Kala Krishna

Pennsylvania State University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Suddhasatwa Roy

California State University, Fullerton - Department of Economics ( email )

Fullerton, CA 92834
United States

Marie C. Thursby (Contact Author)

Georgia Institute of Technology - Strategic Management Area ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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