Faculty Profiles - YANASE Akihiko

Papers - YANASE Akihiko

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Mixed Market Structure and R &D: A Differential Game Approach Reviewed International coauthorship International journal

Yanase, A; Long, NV

DYNAMIC GAMES AND APPLICATIONS Vol. 14 ( 1 ) page： 97 - 132 2024.3

Authorship：Lead author,　Corresponding author Language：English Publishing type：Research paper (scientific journal) Publisher：Dynamic Games and Applications

We consider a dynamic model of an industry consisting of a few large firms, which can manipulate the market outcome, and a mass of small enterprises, each of which has a negligible impact on the market. The production costs of the respective firms depend on the stock of knowledge capital, which accumulates over time through research and development (R &D) investment made by large firms. The model is a variant of the differential game of voluntary provision of public goods, but in contrast to previous studies, we focus on the interaction between market competition and dynamic game outcomes. We derive both open-loop and Markov-perfect Nash equilibria. There exists a unique open-loop Nash equilibrium. By contrast, depending on the parameters of the model, there can be two linear Markov-perfect Nash equilibria. We also examine the short- and long-run effects of a change in the number of large firms. An increase in the number of large firms unambiguously harms both types of firms in the short run but may benefit them in the long run. In the open-loop Nash equilibrium, the relationship between the number of large firms and the steady-state stock of knowledge capital is inverted-U shaped. Concerning the Markov-perfect Nash equilibria, the effect of increased competition from large firms depends on the specific feedback strategy chosen in equilibrium.

DOI： 10.1007/s13235-023-00504-z

Trade costs, infrastructure, and dynamics in a global economy Open Access

Yanase, A

INTERNATIONAL JOURNAL OF ECONOMIC THEORY Vol. 22 ( 1 ) page： 40 - 62 2026.3

Publisher：International Journal of Economic Theory

This study develops a dynamic two-country model with trade costs linked to international infrastructure stock. With variable markups and firm heterogeneity, the welfare impact of trade costs depends on firms' cost distribution. Governments engage in a dynamic public investment game, leading to multiple steady states. The dynamic equilibrium of the noncooperative policy game may exhibit history dependency; a small (large) initial infrastructure stock results in decreasing (increasing) infrastructure over time, leading to autarky (freer trade). Comparing these outcomes with international cooperation reveals that cooperation achieves a higher steady-state infrastructure stock and helps avoid a “low development trap.”.

DOI： 10.1111/ijet.70011

On the Provision of International Public Goods in Dynamic Open Economies Reviewed International journal Open Access

Yanase, A

REVIEW OF INTERNATIONAL ECONOMICS Vol. 34 ( 1 ) page： 198 - 218 2026.2

Language：English Publishing type：Research paper (scientific journal) Publisher：Review of International Economics

This study develops a dynamic two-country model with an international public good, the stock of which positively affects the productivity of the private-goods sectors in each country, and the evolution of the stock is determined by each country's voluntary contribution in the form of public investment. Two scenarios are examined: A cooperative solution, in which the countries maximize global welfare, and a noncooperative equilibrium, in which each country maximizes its own welfare. This study examines how globalization affects the countries' contribution levels, the stock of the international public good, and welfare. The country that makes more efficient contributions (i.e., higher productivity of public investment) has a comparative advantage in the good that is more sensitive to the stock of the international public good. In the noncooperative equilibrium, free trade leads to a higher steady-state stock of the international public good than autarky. Furthermore, in both cooperative and noncooperative scenarios, the country with lower contribution efficiency unambiguously benefits from globalization, whereas the country with higher contribution efficiency may experience welfare losses.

DOI： 10.1111/roie.70022

Endogenous comparative advantage via symmetry-breaking policy equilibrium

Suga, N; Yanase, A; Tawada, M

SCANDINAVIAN JOURNAL OF ECONOMICS 2025.12

Publisher：Scandinavian Journal of Economics

In this study, we analyze a symmetric policy game in a two-country model in which domestic policy affects a Ricardian comparative advantage. Considering a two-good, one-factor set-up in which each country's government provides a productive public good, we show that ex ante identical countries under free trade always choose different levels of public goods in the Nash equilibrium – meaning symmetry-breaking always occurs. We also examine how our analysis is modified in the presence of trade costs and in a multi-good set-up. Moreover, we present a more elaborate model with input–output linkages and entry regulation in an upstream market as an application.

DOI： 10.1111/sjoe.70007

Cross-country heterogeneity in production-environment nexus and international trade

Li, G; Yanase, A

ECONOMIC MODELLING Vol. 144 2025.3

Publisher：Economic Modelling

This study examines the interplay between international trade and the environment using a dynamic two-country, two-sector model that captures the impact of economic activities on environmental quality and the subsequent feedback on resource-good sector productivity. We focus on the scenario in which two countries differ in sectoral ranking of environmental impacts and export their respective “dirtier” goods under trade. We show that in this context, trade harms long-term environmental quality in both countries, and the welfare effects of trade depend on the magnitude of productivity and terms-of-trade changes. Smaller pre-trade comparative advantages and greater trade-induced environmental deterioration increase the likelihood of welfare loss. The presence of such cross-country differences can result in multiple equilibria under trade, with contrasting welfare implications. We calibrate the model using data from China and Ghana to demonstrate its real-world relevance. These findings highlight the importance of considering country-specific characteristics of production–environment relationships in assessing trade impacts and designing policies.

DOI： 10.1016/j.econmod.2024.106973

Public Infrastructure Strategically Supplied by Governments and Trade in a Ricardian Economy

Suga, N; Tawada, M; Yanase, A

FOREIGN TRADE REVIEW Vol. 58 ( 1 ) page： 68 - 99 2023.2

Publisher：Foreign Trade Review

In a simple two-country Ricardian economy with public infrastructures, we consider a simultaneous and non-cooperate game between governments with respect to public infrastructure supply. Then it is shown that a country with larger (smaller) factor endowment exports a good whose production is more (less) dependent on public infrastructures, and both countries will gain from trade as long as factor endowment differs between countries. However, the following special features appear. (i) Any incompletely specialising country produces two goods at an inner point of the production possibility set. (ii) If factor endowment is the same between countries, the trading equilibrium is attained by the pattern of specialisation such that each country specialises in one good different from each other and both countries become better off. Which country specialises in which good is indeterminate. The result shows a typical case of symmetric breaking. JEL codes: F11, H41.

DOI： 10.1177/00157325221119043

Infrastructure and International Trade Theory:Multiple Equilibria, Trade Patterns, and Nonlinear Dynamics

Yanase Akihiko

The International Economy Vol. 26 ( 0 ) page： 20 - 43 2023

Language：English Publisher：The Japan Society of International Economics

<p>There is no doubt that various types of public infrastructure play a key role in economic development and social well-being. Over the last two decades, a number of empirical studies have analyzed the relationship between the levels or quality of physical or institutional infrastructure and international trade. While there is enough evidence for the positive effects of infrastructure on trade volumes, the effects on comparative advantage and trade patterns are yet to be elaborated. There is also little evidence on how infrastructure levels can be affected by trade openness or country-specific characteristics through trade channels. The lack of clear empirical evidence on these aspects suggests that the interactions between infrastructure and trade can be complex. A possible explanation of such complexity is the nonconvexity of production technology or increasing returns in the presence of infrastructure. It is well known that nonconvexities and increasing returns may cause multiple equilibria. This paper focuses on the possibility of such multiple equilibria in the context of infrastructure and trade. In particular, this paper presents recent theoretical studies demonstrating the existence of multiple equilibria, irregular patterns of trade, and history-dependent dynamic paths.</p>

DOI： 10.5652/internationaleconomy/ie2023.26.03.ay

Trade, Resource Use and Pollution: A Synthesis

Li, G; Yanase, A

ENVIRONMENTAL & RESOURCE ECONOMICS Vol. 83 ( 3 ) page： 861 - 901 2022.11

Publisher：Environmental and Resource Economics

We develop a two-sector dynamic model of trade and the environment. Both resource-good and manufacturing sectors generate environmental burdens that can adversely affect the environment in a country over time. The resource-good sector is environmentally sensitive, with its productivity suffering in line with declines in the environmental stock. Countries can be categorized into two types: one in which the resource-good sector is more environmentally harmful than the manufacturing sector, and another in which the opposite is true. At every point in time, labor allocations and specialization patterns under free trade are dependent on country size, technology, household preferences, and environmental stocks. Trading countries’ types have implications for the dynamics of environmental stocks and the corresponding environmental and welfare consequences of trade. If two trading countries are of the same type, one country exports its dirtier goods and the other must export its cleaner goods; consequently, at least one country gains from trade. If the two countries are of different types, they can export their respective dirtier goods and may both lose from trade.

DOI： 10.1007/s10640-022-00713-x

Dynamic Game of International Pollution Control with General Oligopolistic Equilibrium: Neary Meets Dockner and Long

Yanase, A; Kamei, K

DYNAMIC GAMES AND APPLICATIONS Vol. 12 ( 3 ) page： 751 - 783 2022.9

Language：Japanese Publisher：Dynamic Games and Applications

This study develops a two-country differential game model of transboundary pollution control with a continuum of polluting and oligopolistic industries. Governments choose the paths of their pollution permits, the market-clearing prices of which are determined endogenously, as in a general oligopolistic equilibrium model. We consider both autarky and bilateral free trade of polluting goods and derive solutions under international cooperation, open-loop Nash equilibrium, and linear Markov-perfect Nash equilibrium in each regime. Under autarky, we obtain similar results to those in the literature; that is, international cooperation achieves the least pollution, and the linear Markov-perfect Nash equilibrium results in higher pollution than the open-loop Nash equilibrium. Under free trade, each country’s welfare depends on the emissions of both countries, and if trade is frictionless, the same solution can be achieved by international cooperation, the open-loop Nash equilibrium, and the linear Markov-perfect Nash equilibrium. Moreover, when all industries have the same number of firms and trade is frictionless, free trade is better for the environment than autarky. However, if trade costs exist, international trade may result in higher pollution than autarky.

DOI： 10.1007/s13235-022-00434-2

Domestic product standards, harmonization, and free trade agreements

Yanase, A; Kurata, H

REVIEW OF WORLD ECONOMICS Vol. 158 ( 3 ) page： 855 - 885 2022.8

Language：Japanese Publisher：Review of World Economics

This study considers endogenous domestic standards on products to control negative consumption externalities using a three-country model of international oligopoly with a possible free trade agreement (FTA). The authors examine how the level of product standards and welfare are affected under an FTA and how the harmonization of standards affects the impact of the FTA. They find that if asymmetries in preferences or transboundary externalities are not too strong, an FTA makes product standards more stringent. In such a case, the FTA may or may not make the member countries better off, but it does make the non-member country better off. They also demonstrate that harmonizing the standards across the FTA members makes an FTA more favorable.

DOI： 10.1007/s10290-021-00446-x

Pollution externalities and corrective taxes in a dynamic small open economy

Nakamoto, Y; Yanase, A

INTERNATIONAL TAX AND PUBLIC FINANCE Vol. 29 ( 3 ) page： 667 - 703 2022.6

Language：Japanese Publisher：International Tax and Public Finance

This study examines the effects of tax policies in a dynamic model of a polluted small open economy with two sources of flow pollution—consumption and production—controlled by consumption and income taxes. In this setting, accumulated pollution negatively impacts households’ utility. We show that in a decentralized dynamic competitive equilibrium under exogenous tax rates, whereas a permanent increase in consumption and income taxes unambiguously reduces the steady-state pollution stock, a temporary increase in these taxes may lead to more pollution in the long run. This outcome suggests that more stringent environmental policies might be ineffective if the regulation is only temporary. We also derive the socially optimal solution and examine the optimal tax paths to achieve the social optimum. If distaste and leisure effects are sufficiently strong, tax rates decrease along the optimal path as pollution increases over time, and vice versa.

DOI： 10.1007/s10797-021-09679-w

Government, trade and comparative advantage, revisited

Tawada, M; Suga, N; Yanase, A

CANADIAN JOURNAL OF ECONOMICS-REVUE CANADIENNE D ECONOMIQUE Vol. 55 ( 2 ) page： 1135 - 1165 2022.5

Publisher：Canadian Journal of Economics

This study conducts a detailed analysis of the production possibility frontier (PPF) in an economy with two goods, each produced using labour and a specific factor as inputs, and public infrastructure, which has positive externalities on the production of each good. We show that if the elasticity of a specific factor input into production is sufficiently small, the PPF has a concave–convex–concave shape. Although our model is similar to the one developed in 1992 by Richard H. Clarida and Ronald Findlay, this possibility was overlooked in their analysis and it can generate trade patterns that are against the law of comparative advantage. Nevertheless, trade is always gainful and, as in the existing studies, trade openness increases the provision of public infrastructure in a country exporting goods whose productivity is highly dependent on infrastructure. We also examine the relationship between factor endowments and comparative advantage.

DOI： 10.1111/caje.12589

Trade costs and free trade agreements: Implications for tariff complementarity and welfare

Yanase, A; Tsubuku, M

INTERNATIONAL REVIEW OF ECONOMICS & FINANCE Vol. 78 page： 23 - 37 2022.3

Language：Japanese Publisher：International Review of Economics and Finance

This paper develops a three-country model of intra-industry trade under imperfect competition with trade costs between countries to examine the effects of a free trade agreement (FTA). Under sufficiently high trade costs, FTA member countries might have an incentive to set optimal external tariffs that are higher than the pre-FTA optimal tariffs (i.e., the tariff complementarity effect may not exist) and the formation of an FTA may worsen the non-member country's welfare. Whether the member countries benefit from the FTA depends on the trade costs and the degree of substitutability among differentiated goods.

DOI： 10.1016/j.iref.2021.10.012

Production possibilities and trade in a one-primary factor economy with public infrastructure

Tawada, M; Yanase, A

ASIA-PACIFIC JOURNAL OF REGIONAL SCIENCE Vol. 5 ( 1 ) page： 169 - 189 2021.2

Language：Japanese Publisher：Asia Pacific Journal of Regional Science

In this paper, we consider a Ricardian type of economy with public infrastructure, which is of “creation of atmosphere” type or “unpaid factor” type. We show that, although the production possibility frontier is convex in the creation of atmosphere type of infrastructure but is concave in the unpaid factor type, the optimal supply of public infrastructure increases according to an increase in the good that is more heavily dependent on the infrastructure along the production possibility frontier for both types. Subsequently, we showed that a country with larger labor endowment likely exports the good more heavily dependent on public infrastructure in the creation of atmosphere case, while that country likely exports the other good in the unpaid factor case.

DOI： 10.1007/s41685-020-00162-8

Strategic Investment in an International Infrastructure Capital: Nonlinear Equilibrium Paths in a Dynamic Game between Two Symmetric Countries Open Access

Yanase, A; Long, NV

MATHEMATICS Vol. 9 ( 1 ) page： 1 - 24 2021.1

Publisher：Mathematics

This paper develops a two-country model of intra-industry trade with trade costs that can be reduced by public investment in an international infrastructure capital, the stock of which accumulates over time. Depending on the trade costs and international distribution of manufacturing firms, equilibrium patterns of trade are determined, and national welfare in each country is affected by these trade patterns. Taking into account the relationship between trade costs and national welfare, the governments carry out a dynamic game of public investment. We show that the dynamic equilibrium of the policy game may exhibit history dependency; if the initial stock of international infrastructure is smaller (larger) than a threshold level, the infrastructure stock decreases (increases) over time, and the world economy will end up in autarky (two way free trade) in the long run. We also show that international cooperation is beneficial in the sense that it may enable the world economy to escape from a “low development trap”.

DOI： 10.3390/math9010063

Does more stringent environmental policy harm or benefit polluting firms? A GOLE approach

Yanase, A; Kamei, K

ECONOMICS BULLETIN Vol. 41 ( 4 ) page： 2267 - 2274 2021

On Patterns and Efficiency of Investment in Transport Infrastructure

Yanase Akihiko, Tsubuku Masafumi

The International Economy Vol. 24 ( 0 ) page： 58 - 79 2021

Language：English Publisher：The Japan Society of International Economics

<p>This paper develops a two-country model of intraindustry trade in which overseas shipping incurs transport costs. National governments make investment in the transport infrastructure to reduce the transport costs and enhance national welfare. This paper investigates what patterns of public investment can be derived as equilibrium outcomes and whether these equilibrium investment patterns are socially efficient. It is shown that, among others, if the public investment technology exhibits increasing returns at an international level, coordination problem of public investment may occur.</p>
<p>JEL Classification Number:F12;H54;N70</p>

DOI： 10.5652/internationaleconomy/ie2020.24.02.ay

Does more stringent environmental policy harm or benefit polluting firms? A GOLE approach

Yanase A., Kamei K.

Economics Bulletin Vol. 41 ( 4 ) page： 2267 - 2274 2021

Publisher：Economics Bulletin

We examine the effects of stricter environmental policy in a simple oligopolistic general equilibrium model with pollution emitted by oligopolists. We identify a positive general equilibrium effect of stricter environmental policy on firm profits by lowering the wage rate. In some industries, this positive effect exceeds the negative direct effect of the increase in the firms' costs caused by the stricter environmental policy. Thus, in those industries, more stringent environmental policies benefit firms. Despite this possibility of stricter environmental policy benefiting some industries, the total pollution in the economy unambiguously decreases.

Standards policy and international trade: Multilateralism versus regionalism Open Access

Takarada, Y; Kawabata, Y; Yanase, A; Kurata, H

JOURNAL OF PUBLIC ECONOMIC THEORY Vol. 22 ( 5 ) page： 1420 - 1441 2020.9

Language：Japanese Publisher：Journal of Public Economic Theory

We develop a simple model of policy coordination on domestic standards and examine whether domestic standards policy can lead to regional and multilateral harmonization of standards under the principle of national treatment. This paper focuses on mandatory product and process standards affecting the characteristics of a final good that control negative consumption externalities (e.g., vehicle emissions control and safety standards, restrictions on the use of pesticides for agricultural goods, and safety standards for electrical products). Only the products that meet a country's national standards are allowed to circulate in that country's market. Raising standards reduces negative externalities caused by consumption of a traded good but increases firms’ costs. We use the core as the solution concept. A standards regime is considered to be in the core if it is not blocked by any coalition within countries. The main finding is that a multilateral agreement on standards that maximizes world welfare is only in the core if externalities are local or slightly transboundary. Otherwise, only a regional agreement on standards is in the core. As extensions, we consider many and asymmetric number of firms, asymmetry in market size, fixed costs for different standards, and a multilateral agreement on different standards.

DOI： 10.1111/jpet.12425

Public infrastructure and trade in a dynamic two-country model

Yanase, A; Tawada, M

REVIEW OF INTERNATIONAL ECONOMICS Vol. 28 ( 2 ) page： 447 - 465 2020.5

Language：Japanese Publisher：Review of International Economics

We develop a two-country dynamic trade model with public infrastructure having an “unpaid-factor”-type positive externality on private sectors’ productivity. With welfare-maximizing national governments making infrastructure investment, we show that a country with a smaller labor endowment, a lower depreciation rate of infrastructure, and/or a lower time preference rate will become an exporter of a good that is more dependent on infrastructure and will gain from trade, whereas its trading partner may lose from trade. We consider both the nonstrategic governments case and the case of strategic governments that recognize the effect on the terms of trade.

DOI： 10.1111/roie.12459

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