Tariffs and the Extraction of Foreign Monopoly Rents under Potential Entry

This paper examines the incentives for using tariffs to extract monopoly rents from imperfectly competitive foreign firms. Using a simple Stackelberg entry deterrence model, the rent-extracting policy is attractive if the foreign firm faces a threat of domestic entry. Despite transportation costs, the Stackelberg leader-follower model can lead to intra-industry trade in the same commodity.

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Year of publication:	1980
Authors:	Brander, James A. ; Spencer, Barbara J.
Institutions:	Economics Department, Queen's University

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	3 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005653178