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Assisting Domestic Industries under International Oligopoly: The Relevance of the Nature of Competition to Optimal Policies

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Author Info
Cheng, Leonard K
Abstract

Optimal trade and industrial policies are derived for a home market that is supplied by a domestic firm and a foreign firm. The optimal policy combination can be quite sensitive to the nature of the duopoly's competition. For example, for some cost and demand s tructures, the optimal policy under Cournot competition consists of a domestic production tax and a tariff, but that under Bertrand compet ition consists of a production subsidy and free trade. Copyright 1988 by American Economic Association.

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Publisher Info
Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 78 (1988)
Issue (Month): 4 (September)
Pages: 746-58
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Handle: RePEc:aea:aecrev:v:78:y:1988:i:4:p:746-58

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  1. Andreas Haufler & Michael Pflueger, 2003. "Market Structure and the Taxation of International Trade," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Clarke, Roger & Collie, David R., 2006. "Export Taxes under Bertrand Duopoly," Cardiff Economics Working Papers E2006/15, Cardiff University, Cardiff Business School, Economics Section. [Downloadable!]
    Other versions:
  3. William Milberg, 1999. "The Rhetoric of Policy Relevance in International Economics," Macroeconomics 9904009, EconWPA. [Downloadable!]
  4. Dominik Egli & Frank Westermann, 2000. "Optimal Tariffs and Subsidies And Changes in Markets Structure," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  5. Mark Herander, 1993. "Optimal trade policy in the presence of changing market structure," Open Economies Review, Springer, vol. 4(3), pages 235-245, September. [Downloadable!] (restricted)
  6. Mario Marazzi, 2002. "On the fragility of gains from trade under continuously differentiated bertrand competition," International Finance Discussion Papers 735, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  7. Desquilbet, Marion & Guyomard, Herve, 1999. "Public Policy In Vertically Related Markets: A Cournot Oligopoly-Oligopsony Model," 1999 Annual meeting, August 8-11, Nashville, TN 21561, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  8. Toru Kikuchi, 1998. "Strategic Export Policy in a Differentiated Duopoly: A Note," Open Economies Review, Springer, vol. 9(4), pages 315-325, October. [Downloadable!] (restricted)
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