Pre-tax car prices are particularly low in EU countries with high registration taxes but no car production, meaning that the tax is equivalent to an import tariff and induces international price discrimination. The paper develops a theorectical model to analyse the European Commission's policy...

We study the optimal trade policy against a foreign oligopoly withendogenous quality. We show that, under the Most Favoured Nation(MFN) clause, a uniform tariff policy is always welfare improvingover the free trade equilibrium. However, a nonuniform tariff policyis always desirable on welfare...

We analyse the effects of simple strategic trade policy in a duopoly with vertical product differentiation where firms from a developed and less developed country compete in both qualities and prices in the domestic market. The distinction between the developed and developing country firm is...

This paper examines the effects of foreign entry, in the form of either imports or direct foreign investment, into an oligopolistic market. Incorporating a possible divergence between private and social costs, it first derives simple conditions under which foreign entry reduces welfare relative...

We formulate a dynamic game model of trade in an exhaustible resource with a quantity-setting cartel. We compute the feedback Nash equilibrium and two Stackelberg equilibria under two different leadership scenarios: leadership by the strategic importing country, and leadership by the exporting...

Recent literature on the workhorse model of intra-industry trade has explored heterogeneous cost structures at the firm level. These approaches have proven to add realism and predictive power. This note shows, however, that this added realism also implies that there may exist a positive...