We argue that the rationalization gains often predicted by static applied general equilibrium models with imperfect competition and scale economies are artificially boosted by an unrealistic treatment of fixed costs. We introduce sunk costs into one such model calibrated with real-world data. We...

This paper shows that moving from market segmentation to market integration (i.e. firms can no longer discriminate among markets) may have anti-competitive effects in a repeated game setting in which a simple trigger strategy is the enforcement strategy. In particular, we show that two countries...

This article shows that governments have no incentive to introduce nontariff barriers (NTBs) when they are free to set tariffs but they do when tariffs are determined cooperatively. Quotas are preferred to antidumping restrictions so that the model is consistent with a progression from using...