Firm behavior in declining markets

2015 Fiscal Year Final Research Report

• Project/Area Number: 25780168
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Economic policy
• Research Institution: Yokohama City University (2015); Chiba Keizai University (2013-2014)
• Principal Investigator: Ota Rui 横浜市立大学, 総合科学部, 准教授 (00338229)
• Project Period (FY): 2013-04-01 – 2016-03-31
• Keywords: 衰退市場 / 価格競争 / ダンピング / 市場の質 / 米国白黒テレビ市場 / 経済成長

Outline of Final Research Achievements

The purpose of this study is to investigate firm behavior in declining markets. Specific themes are as follow: pricing an existed product when a firm produces a new substitute simultaneously; exit due to comparative advantage; empirical analysis of declining markets with micro data.
I and co-authors demonstrate the following results: under a two-period durable good monopoly model, price of the new product falls in the second period while price for the old product rises; Stackelberg competition is a rationale for selling an existed product even if a new substitute is available; in a two-country trade model, a discrete demand shift dumping raises the price of an existing home product. Since this implies that domestic consumers are worse off, the act of trade protection can be beneficial to domestic consumers. I collect data on goods produced in Fukushima and in China, whose demand both declined because of Great East Japan Earthquake and several incidents harming food safety, respectively.

Free Research Field

国際貿易論、産業組織論