, welfare rises with protection for relatively low tariff levels. But protection always distorts sourcing decisions, and is … ineffective at altering investment incentives whenever the specialized supplier is foreign, as in that case tariffs have no effect … on the parties' negotiation surplus. Tariffs can be particularly harmful when the firms have curbed opportunism through …

Several developing countries impose high tariffs, directly or indirectly, on imports of manufactured goods such as … affirmative under several scenarios. Results show that while governments use tariffs to interact strategically with other …