PRODUCT DIFFERENTIATION AND OLIGOPOLY IN INTERNATIONAL MARKETS: THE CASE OF THE U.S. AUTOMOBILE INDUSTRY

摘要

This paper develops and estimates a model of the U.S. Automobile Industry On the demand side, a discrete choice model is adopted, that is estimated using micro datei trom the Consumer Expenditure Survey. The estimation results are used in conjunction wrtn population weights to derive aggregate demand. On the supply side the ?Jtomow? industry is modelled as an oligopoly with product differentiation. Equilibrium isi charac terized by the first order conditions of the profit maximizing firms. The estimatorinaultt are used in counterfactual simulations to investigate two trade policy issues: the effects oi the VER, and exchange rate pass-through.