Symmetry-breaking and trade in neoclassical economies with domestic policies having diminishing effect to production scale
Tsuyoshi Shinozaki,
Makoto Tawada,
Mitsuyoshi Yanagihara
Abstract:PurposeThe aim of this paper is to investigate whether a Nash equilibrium of a two-country trading economy is symmetry-breaking or not.Design/methodology/approachThe approach to tackle this topic is a theoretical treatment by the general equilibrium trade theory and game theory.FindingsIf each government's domestic policy serving private production is diminishing to the private production scale, the Nash equilibrium is not symmetry-breaking.Originality/valueIn the existing study of Chatterjee (2017), a similar… Show more
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