ABSTRACT
The integration of ideas from industrial organization theory into international trade has encompassed theoretical developments that have both positive and normative economics dimensions. The paper by Marie and Jerry Thursby relates more to the first of these dimensions. The authors postulate a theoretical model of possible price and output behavioural interelationships between specific exporters of wheat to Japan, namely the Canadian Wheat Board and the United States wheat exporting sector. Estimates of the Japanese elasticities of demand for U.S. and Canadian wheat are derived econometrically and are used to calculate conjectural variation parameters for both exporters; the standard errors of these estimates are manipulated to give estimates of the variability of the conjectures. The purpose given for the study is to ascertain the nature of exporter competition as a basis for possible future policy applications. This discussion comments first on general features of the positive and normative facets of strategic trade theory before commenting specifically on features of this particular study.
