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Richard Roll observed that continuous markets are more volatile than other market structures. If it is true that continuous markets induce volatility, then unless we change that market structure, we will continue to be plagued with sporadic bursts of nonfunctional, uninformative volatility. This article looks to the underlying reasons and suggests a more serviceable market structure.

We examine the interaction between goods trade and market power in domestic trade and distribution sectors. Theory suggests a set of linkages between service-sector competition and goods trade supported by econometrics involving imports of 22 OECD countries vis-à-vis 69 exporters. Competition in services affects the volume of goods trade while the market structure of the domestic service sector becomes increasingly important as tariffs are reduced. Empirically, lack of service competition apparently matters most for exporters in smaller, poorer countries. By ignoring the structure of the domestic services sector, we may be seriously overestimating the market-access benefits of tariff reductions.

We examine an issue at the nexus of domestic competition policy and international trade, the interaction between goods trade and market power in domestic trade and distribution sectors. Theory suggests a set of linkages between service-sector competition and goods trade supported by econometrics involving imports of 22 OECD countries vis-´a-vis 69 exporters. Competition in services affects the volume of goods trade. Additionally, because of interaction between tariffs and competition, the market structure of the domestic service sector becomes increasingly important as tariffs are reduced. Empirically service competition apparently matters most for exporters in smaller, poorer countries. Our results also suggest that while negotiated agreements leading to crossborder services liberalization may boost goods trade as well, they may also lead to a fall in goods trade when such liberalization involves FDI leading to increased service sector concentration.

In his book 'Marktform und Gleichgewicht, published initially in 1934, Heinrich von Stackelberg presented his groundbreaking leadership model of firm competition. In a work of great originality and richness, he described and analyzed a market situation in which the leader firm moves first and the follower firms then move sequentially. This game-theoretic model, now widely known as Stackelberg competition, has had tremendous impact on the theory of the firm and economic analysis in general, and has been applied to study decision-making in various fields of business. As the first translation of von Stackelberg's book into English, this volume makes his classic work available in its original form to an English-speaking audience for the very first time.