In a North-South vertically differentiated duopoly, the analysis in this paper derives equilibrium government policies towards parallel imports. By incorporating strategic interaction at the policy-setting stage and the product market, the model sheds new light on (i) the effects of parallel...

Parallel imports are genuine products brought into a country without the authorization of the copyright, patent, or trademark owner. Countries vary considerably in their legal treatment of parallel imports, as determined by their choice of exhaustion doctrine. A new model analyzes parallel...