Abstract
In the present days, many durable goods such as cars and electric appliances are traded. On the other hand, as well known export subsidy is the one of policy tools in international trade. In this paper, durable goods and strategic trade policies in the third market model is analyzed. We make an analysis on how the strategic trade policies are affected by product durability. As a result, it is shown that the durability can weaken the effect of the opponent's subsidy as a strategic policy. As the product durability of own country rises, the optimal subsidy of own country increases. On the contrary, as the product durability of the foreign country rises, the optimal subsidy of own country decreases. Furthermore, it is investigated how the optimal Nash equilibrium subsidy by the game between the two governments changes with the product durability and how it influences the volume of trade, social welfare and firm's profits.
JEL classification : L13, F13
