Is “Three” a lucky number? Exchange-rate exposure in a “Rule of Three” model

摘要: We examine exchange-rate exposure in an international model of differentiated goods using the frequently encountered markets “Rule Three” (RoT) market structure that allows both within and between countries competition. In a static setting addition domestic competitor increases internationally competing firms relative to duopoly unless pass-through one its rivals is elastic. Using dynamic model, we study intertemporal effects on firms’ long-run exposure. The gap RoT long run for firm facing can be higher or lower than short-run exposure, while foreign monopolist has smaller