Tariffs and Subsidies with Price Competition and Integrated Markets: The Mixed Strategy Equilibria.
This paper analyzes trade policy in an integrated market in which two firms are price competitors. If tariff or export subsidies are in place, there is no equilibrium in pure strategies. The import tariffs and export subsidies give one firm a price advantage in one market. The effect of this is to reduce the incentive, usually a characteristic of price competition, to undercut prices. This reduction in the intensity of competition means that import tariffs may be overshifted and that an export subsidy raises consumer prices in both countries. Copyright 1994 by Royal Economic Society.
Year of publication: |
1994
|
---|---|
Authors: | Venables, Anthony J |
Published in: |
Oxford Economic Papers. - Oxford University Press. - Vol. 46.1994, 1, p. 30-44
|
Publisher: |
Oxford University Press |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Economic Integration and the Location of Firms.
Venables, Anthony J, (1995)
-
Internal Geography and External Trade: regional disparities in Italy, 1861-2011
A'Hearn, Brian, (2011)
-
Land deals in Africa: pioneers and speculators
Collier, Paul, (2011)
- More ...