Danilin M.N.V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences, Moscow, Russian Federation maksdanilin@gmail.com
Importance The article discusses the effects of restricted supply of technologies and illustrates the Russian rocket engines and the market of spacecraft launch services. Objectives I evaluate probable effects of embargo and changes in prices, determine conditions and price range, which would be affordable for customers to ensure self-sufficiency, and when the risk is insignificant. Methods I propose a simple economic and mathematical model to evaluate whether export of strategic products is efficient, provided that one of the parties manufactures them and exports a part of them, while the other party initially imports them. However, the other party may choose a self-sufficiency strategy in certain conditions. Results Having analyzed the model, I concluded on various scenarios for trade in strategic products, bearing in mind that competitors might start their own production. The article demonstrates how beneficial export prices may possibly change due to uncertainty of initial data or influence of competitive intelligence. I describe how uncoordinated activity of various economic institutions may impact the market actors' behavior. Conclusions and Relevance Having analyzed specific markets, I concluded that it was not always efficient to restrict export of strategic components and materials. When certain restrictions for supply of raw materials and components are in place, the importing country may be forced to localize the required production. Combined income of both parties substantially depends on competitive intelligence, uncertainty of information and its protection. As the national institutional mechanism is imperfect, it reduces combined income from various economic sectors and considerably changes the market actors' behavior.
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